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Sonic the Hedgehog creator given suspended prison sentence, $1.2M fine

Yuji Naka found guilty of insider trading while at Square Enix

A photo of Yuji Naka standing in an office
Yuji Naka in 2020.
Image: Square Enix
Owen S. Good is a longtime veteran of video games writing, well known for his coverage of sports and racing games.

Yuji Naka, co-creator of Sonic the Hedgehog, was given a prison sentence of two years and six months, as well as fines totaling $1.2 million, for his role in an insider trading scheme dating to 2020.

According to Japanese news agency Jiji Press, Naka’s prison sentence has been suspended for four years, meaning he avoids serving time as long as he adheres to the conditions of his release and doesn’t break the law again during this time. In suspending Naka’s sentence, the judge noted that he had shown remorse for his crime.

Naka, 57, was twice arrested on insider trading charges, first in November, again in December, in unrelated matters. The sentencing on Friday concerned both cases.

The first arrest involved a scheme to buy stock in developer Aiming in early 2020, based on inside information that it would be developing Dragon Quest Tact, a mobile title. Square Enix’s project and partnership with Aiming was not public at that time, and Naka was at Square Enix working on the ill-fated platformer Balan Wonderworld.

In the second matter, Naka and another Square Enix employee, Taisuke Sazaki, were accused of buying shares in Ateam, which developed the mobile spinoff Final Fantasy 7: The First Soldier. The case alleges that Naka and Sazaki acted before the collaboration was made public. The two men were said to have made “hundreds of millions of yen” in the deal ($1 million U.S. converts to more than ¥140 million).

Naka co-created Sega’s mascot, Sonic the Hedgehog, in collaboration with artist Naoto Ohshima in the late in the early 1990s. He left Sega in 2006 to work independently before joining Square Enix in 2018, where he teamed back up with Ohshima to develop Balan Wonderworld.

In an April 2022 interview, Naka revealed he was removed from Balan Wonderworld’s development six months before its 2021 launch and sued Square Enix, though he did not disclose how that case was resolved. Naka departed Square Enix about two months after Balan Wonderworld launched.

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