Sonic The Hedgehog co-creator given suspended sentence for insider trading

Yuji Naka, the co-creator of Sonic The Hedgehog, has been found guilty of insider trading. The former Sega and Square Enix developer has been given a suspended sentence of two years and six months, and ordered to pay two fines totalling ¥173 million (around £948,000).

Naka was arrested in November 2022 and again the following month under Japan’s Financial Instruments and Exchange Act. The arrests related to the purchase of shares worth a total of ¥147 million (around £805,000) in two development studios shortly before each announced contracts to develop mobile spin-offs Dragon Quest Tact and Final Fantasy VII: The First Soldier.

Naka, who was an employee of Square Enix at the time, was thought to have had advanced knowledge of the deals. In March 2023, Naka acknowledged his guilt during a court hearing.

Before joining Square Enix, Naka had a lengthy career at Sega, working as lead programmer on the original Sonic The Hedgehog and eventually becoming president of Sonic Team. He left Sega in 2006 and founded indie developer Prope, who primarily released iOS and Nintendo Wii games.

In 2018 Naka joined Square Enix and re-united with Sonic co-creator Naoto Ohshima to work on 3D platformer Balan Wonderworld. Naka was removed from the project six months before release and subsequently sued Square Enix, accusing the Japanese publisher publicly of not caring about video games. Balan Wonderworld was released in 2021 to near-universal derision, and Naka left the company two months later.