Developer Accuses Project Phoenix Director Of Embezzling $1 Million From Kickstarter

Game developer Tariq Lacy has accused director Hiroaki Yura of stealing money from a Kickstarter called Project Phoenix to fund his latest game, Tiny Metal. Yura has fired back with his own allegations, accusing Lacy of sexual harassment, which Lacy denies. It's a back-and-forth mudslinging fight and yet another piece of drama surrounding Yura's disastrous $US1 million ($1.3 million) Kickstarter project.

Concept art for Hiroaki Yura's newest game, Tiny Metal

Rumours have been swirling about Project Phoenix since it first popped up in 2013, and among independent game developers in Japan, the million-dollar Kickstarter campaign has long been a source of consternation. Promising to "set a new standard of excellence for the Japanese gaming industry," Project Phoenix raised $US1,014,600 ($1,344,041) from 15,802 backers before failing to meet its deadlines. In 2015, Yura said the game would be delayed an additional three years. And in April 2017, Yura told backers that he planned to release a different game first, explaining that he'd found some investors who would be willing to help back Project Phoenix if this new game succeeded.

That new game is Tiny Metal, which was planned for release today before it received a last-minute delay to December 21. And Lacy, who worked as a marketing and PR manager on Tiny Metal, took to the Project Phoenix Twitter and Facebook accounts to accuse Yura's company of running a scam.

Here's what he wrote:

Two months after I was hired at AREA 35, I had learned that the company funded this project by running a scam through Kickstarter. They gathered several famous creators and ran a campaign known as "Project Phoenix", then used the $1,000,000 received from the campaign to fund the "TINY METAL" project.

Here's how it happened: after they received the Kickstarter money for Project Phoenix, they subsequently shut down their original company (Creative Intelligence Arts, or "CIA"), then used that same money to establish AREA 35 and pay for staff, equipment, and an office to make TINY METAL.

The company's CEO, Hiroaki Yura, asked me to deflect any accusations that this money was from anyone other than private investors; in actuality, Hiroaki only dipped into his own funds and asked for money from private investors after the funding that he had secured for TINY METAL was running low. I refused this request to fabricate and minimise the truth for the purpose of misleading others, then told Hiroaki to remove me from all matters regarding Project Phoenix so that I would not be implicated in this affair.

You will notice progress reports on the Project Phoenix Kickstarter blog, as well as their official Project Phoenix blog. These were written periodically by Hiroaki Yura himself in order to squander doubts that the project was dead. The nature of these blog entries, through their infrequency and intentional ambiguity, reveals to us that the project never was meant to be released. To Hiroaki, this ruse under the guise of a campaign and blog was merely an effective means to receive funding while removing any obligations to investors.

Although the people behind Project Phoenix quickly deleted these posts, they spread quickly amongst backers and observers who have long been frustrated by Yura's long-delayed project. (I received nearly a dozen emails when it happened.)

When I reached out to Yura for comment, he fired back with his own allegations about Lacy. "The post was posted by a staff whose contract has been bought out due to him being a toxic employee who has sexually harassed our female staff amongst many other problems," Yura said in an email. "The post is factually incorrect and thus was deleted from our account. That's all we have to say for now, we're looking into releasing legal documents and other proofs after discussing this with our lawyer." Yura added that he couldn't offer more details but said there were "three witnesses to that happening during that time".

Lacy denied these accusations, saying in an email, "No, Hiroaki's statement about me being toxic and sexually harassing a staff member is not true. He is reacting to my statement with libel." He also sent over a few hundred logs from the company's Slack chat channel, although upon review, few if any of those logs appear to be relevant to either claim.

Yura said the Project Phoenix Kickstarter money went into the creation of the alpha build, which was poorly received by fans. He added that he'd also invested money he received from other jobs, such as his work on the Square Enix game I Am Setsuna. "So in effect, not only did we use up the Kickstarter money and we have the assets to show for it, we also pitched in quite a bit of funds ourselves as apparent through all the videos, concepts, assets, gameplay that we have shown over the years," Yura said in an email. "Tiny Metal['s] initial investment came from a group of investors from Australia. This wasn't enough however, to finish the development so the rest came through a deal with Sony Music Entertainment."

This all makes for an ugly, public battle that will no doubt hang over the release of Tiny Metal, and it's yet another blemish on a Kickstarter project that many backers suspect will never happen.


    Is it just me or is Sexual Harassment becoming the catch cry these past few months? I'm not trying to say anyone is claiming it as a way to deflect suspicion or attract attention, it just seems there are a lot of stories that mention it both in gaming and general news these days.

      I think it highlights that sexual harassment has been such commonplace in so many industries and has been swept under the rug until now...

      Last edited 21/11/17 4:04 pm

      The frequency has certainly increased substantially in the past few months.

      While it's good that many are feeling empowered to speak out, there's no shame in noticing the suspicious manner in which it has permeated nearly every facet of media in only a few short months and it would irresponsible not to notice that there is most definitely some special interest muddled in there.

      If you'd been sexually harassed or assaulted, and had been staying quiet because you thought speaking out would damage your career, then seeing what has happened to Harvey Weinstein might have been enough to come forward. There's no need for a conspiracy.

      With that said, I wouldn't be surprised if a minority of the accusations are false. The George Takei one seems the least credible.

    Japan doesn't have the greatest record when it comes to kickstarter.

    Claims like these really need some kind of evidence for support. I wouldn't be surprised if they were true (lord knows there's been some super dodgy Kickstarter campaigns) but if he was going to call out something like this maybe build a case first?

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