Sonic the Hedgehog creator arrested in Japan

The co-creator of the iconic video game Sonic the Hedgehog was arrested today by the Special Investigation Department of the Tokyo District Public Prosecutor’s Office for alleged insider trading, according to a report in Variety.

Naka Yuji, along with two other former employees of game developer Square Enix, were detained on insider trading charges.

The scandal involves Square Enix and the online game producer Aiming. Between December 2019 and December 2020, the two companies quietly planned a joint venture to create a new dragon quest mobile phone game

But Yuji and his associates gained access to confidential information about the upcoming deal before the public announcement, purchasing 10,000 shares of Aiming for approximately $20,000. The illegal trading scheme violates the Foreign Exchange and Financial Instruments Act.

At press time, it was not yet known if any of those arrested sold their shares.

Who is Yugi Naka?

Yugi Naka in 2005. Photo by Kevin Winter/Getty Images

Naka, 57, is a cult figure in Japan. In 1991, while working for the video game company Sega, he co-created Sonic the Hedgehog, a game starring a blue hedgehog with spiky hair. Sonic was Sega’s answer to the popular “Super Mario” game series, created by Nintendo.

Sonic became a huge success for Sega, but Naka did not feel he received proper credit for contributing to the company’s financial success. He left the parent company to join the American Sega Technical Institute, where he developed new iterations of “Sonic”, only to return to Sega and Japan in 1994.

In 2006, Naka left Sega again to launch his game company Prope, which created games for the Nintendo Wii device. He joined Square Enix in 2016 but left the company in early 2022 after being sacked as director of the “Balan Wonderworld” game.

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