Former Staff Accuses Project Phoenix Director of Embezzling $1 Million from Kickstarter Money for New Game

A former PR manager and marketing staff for the Kickstarter-funded and mostly delayed Japanese RPG Project Phoenix has accused the game’s director of embezzling money from the crowdfunding campaign and using towards funding a completely new game.

Tariq Lacy, former PR manager and marketing staff at Area 35, is now claiming game director Hiroaki Yura embezzled that money and used it towards Area 35’s new game, Tiny Metal. Yura responded by accusing Lacy of sexual harassment during his time at the Tokyo-based company.

Project Phoenix raised over $1 million in crowdfunding back in 2013, and it hasn’t really seen a substantial release or any semblance of a release window since then.

Here’s the entire post, which is now deleted:

My name is Tariq Lacy, and until recently I worked at a company in Tokyo called AREA 35 as a marketing and PR manager for TINY METAL, a game that will launch tomorrow.

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 first used the vast majority of the Project Phoenix Kickstarter, then asked for additional money from private investors only after funds were running low. I 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 assuage fears 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.

Unfortunately for us all, industry legends, indie creators, and gamers alike, this man’s deception represents an enormous blow to the health of our industry, besmirching our medium while robbing each and every one of us of the trust that fuels our relationships with fellow business partners, developers, and consumers.

We must do what we can to call out the unjust. I hope that my coming to you on this issue is a step toward more righteous business practices in our industry.

We deserve better. You Project Phoenix backers deserve your money back.

What’s even stranger is that shortly after the post was deleted, a surprise delay was announced for Tiny Metal for exactly one month after its planned release tomorrow.

Coming from this, a post was sent out to social media and Niche Gamer directly via a press release. It’s meant to confirm the game’s delay, but it subtly notes the former post by Lacy is completely illegitimate:

To be read to all troops

Urgent communique: We have a saboteur! A former soldier intercepted and changed battle plans and instructions without his superior officer’s approval. He was caught and removed from the front lines, but escaped into enemy territory! He is now sending out his own propaganda messages to our soldiers. We are working to recover the damage, but we must delay our invasion date to Dec. 21. I want every soldier to know that I have complete confidence that we will successfully deploy without further delays. I know you are eager to go into battle. I know our enemy is strong. But together, we will prevail! Onward!!!

Lieutenant Nathan Gries of Artemisia needs more time to gather his forces, and the next planned release date will hopefully be in time for Christmas on December 21st.

It remains to be seen if these claims from either parties are true, but it does seem like Yura has an affinity for attempting crowdfunding through Kickstarter, as Tiny Metal ran an unsuccessful campaign on the platform as well. When its Kickstarter failed, they said development would continue (as they noted that was the case from the beginning).

However, it is worth noting the anime “Under the Dog” Creative Intelligence Arts successfully funded on Kickstarter with veteran Japanese anime creators literally ran into issues due to what they publicly chalked up to as creative differences, forcing CIA and Yura (who acted as creative producer) out of the production entirely.

Lastly, it’s worth mentioning Tiny Metal is seemingly a real game that could actually get a release – it had a playable prototype since its announcement and Sony Music’s new publishing arm “Unties” is publishing the game, across PC, PlayStation 4, and the Nintendo Switch.

How do you feel about the entire debacle? Is your trust in crowdfunding/Kickstarter lower, or was it nonexistent already? Sound off in the comments below!

Brandon Orselli


Big Papa Overlord at Niche Gamer. Italian. Dad. Outlaw fighting for a better game industry. I also write about music, food, & beer. Also an IT guy.