Legendary game designer Yuji Naka has been arrested along with other Square Enix employees on suspicion of insider trading, according to reports from Japanese media. The co-creator of the Sonic the Hedgehog brand, and a driving force behind beloved Sega titles like Nights into Dreams, Naka had stated last year that he was considering retirement following his departure from Square Enix.
Yuji Naka began working for Japanese developer Sega in the mid-1980s, making a name for himself working on titles like the original Phantasy Star. Naka was eventually tasked by Sega with creating a game that could show off the processing power of the Sega Genesis, with a mascot that could rival Nintendo’s popular Mario, leading to the creation of the legendary Sonic the Hedgehog. The Sonic franchise became a hit with gamers, with the titular character becoming a household name among fans, and Naka went on to help in the development of a number of sequels. The popularity of the franchise even grew so large that Yuji Naka recently confirmed that Michael Jackson was involved with Sonic 3 at one point.
In a story first shared by Japanese news outlet Automaton on November 17, it was reported that two employees of Square Enix had been arrested on charges of insider trading. News of these arrests was followed hours later by reports from Fuji News Network that Yuji Naka had also been taken into custody by Tokyo Police facing similar charges. Naka and the other suspects arrested reportedly bought shares in developer Aiming Co in 2020, shortly ahead of the announcement that the company was working on a new Dragon Quest game.
It appears that Naka and the two other Square Enix employees, both of whom had production credits on multiple Square Enix titles, used their insider knowledge of the company’s business dealings to try to profit off the then-unannounced collaboration with Aiming Co. Responding to the developing story, Square Enix issued a statement on November 17 expressing its regret for the alleged actions of Naka and the other arrested employees. The brief statement also confirmed that Square Enix would fully cooperate with financial and criminal authorities, and announced plans to implement procedures to avoid a repeat of the scandal.
While the gaming industry is no stranger to controversy involving some of its most prominent figures, such controversies typically involve software bugs or gameplay decisions rather than blatant financial malfeasance. This case of alleged insider trading has the potential to tarnish Yuji Naka’s legacy, which was already on shaky ground after the high-profile failure of his game Balan Wonderworld. As the Sonic franchise experiences a bit of a resurgence thanks to the success of two blockbuster films and the recent release of Sonic Frontiers, the man behind the speedy blue blur may be wishing he, too, could run away from his troubles right about now.