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Sonic creator Yuji Naka faces 2.5 year prison sentence

Sonic co-creator and former Sonic Team president Yuji Naka is facing up to two and a half years in prison and fines for insider trading at Square Enix.

Sonic co-creator Yuji Naka reportedly faces a prison sentence of two and a half years after alleged insider trading during his time at Square Enix. Following his work on Sonic the Hedgehog, Naka joined Final Fantasy developer Square Enix in 2018, twelve years after leaving Sega and working on projects with his independent studio Prope. He went on to create platform game Balan Wonderworld, which was widely panned at release.

Naka departed Square Enix in 2021 following the release of Balan Wonderworld, later claiming that he was removed as the game’s director six months prior to its release, following internal disagreements. In November 2022, Naka was arrested by the Tokyo District Public Prosecutors Office alongside two other former Square Enix employees, and was charged with accusations of insider trading.

The prosecution claims that Naka invested heavily in shares of development studios Aiming and ATeam Entertainment before it was publicly revealed that they were working on Square Enix properties (Dragon Quest Tact and Final Fantasy 7: The First Soldier, respectively).

Sonic creator Yuji Naka tweets: "How would you feel if you were suddenly removed from a game that you had worked hard on for over two years, and when you went to court, you found out that they had been talking about me behind my back in court documents and that is why I was removed from the game? Game creators create games with care for the people who play them. Don't you think that people and companies that cannot take care of games are no good? Instead of talking behind my back, don't you think you should tell them directly before removing them?"

As reported by Japanese public broadcaster NHK News, Naka himself admitted in court in March that there was “no doubt” he was privy to such information before it was made public, leading to his purchase of stocks in the companies.

The prosecution claims that this knowledge led to “unfair profits from a significantly more advantageous position than general investors, and undermined the fairness of the market.”

Now, Defaminicogamer reports that, during June 1 proceedings at the Tokyo District court, court prosecutors have demanded “a prison term of two years and six months, a fine of 2.5 million yen, and a fine of 170 million yen.” Those fines total roughly $1.23 million / £1 million, although Defaminicogamer adds that Naka’s defense is seeking a suspended sentence, along with a reduction to the total fines.

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Final judgment is currently expected to be passed on July 7. We’ll keep you up to date on further details as this case progresses.

Header image provided by Yves Tennevin under Creative Commons license.