Japanese Indie Game Developer Sues Crowdfunding Platform Over $170K in Missing Funds

428: Shibuya Scramble, a groundbreaking detective visual novel, immerses players in Japan's Shibuya ward with its live-action photography and intricate timeline mechanics to weave a compelling crime story. First launched on the Wii in 2008, it later arrived on Steam a decade on, earning 'Very Positive' reviews and a dedicated fanbase.

Last year, Jiro Ishii, the executive producer of 428, unveiled Shibuya Scramble Stories, a spiritual successor, initiating a crowdfunding campaign on the Japanese platform Ubgoe. The project swiftly surpassed its funding target within an hour, ultimately collecting 55 million yen (approximately $340,000) by the campaign's conclusion.

What initially appeared to be a resounding crowdfunding triumph took an unexpected turn. In March, it was reported that Skeleton Crew Studio, the developer behind Shibuya Scramble Stories, announced plans for legal action. This came after Ubgoe allegedly disbursed less than half of the raised funds. According to a statement shared by Skeleton Crew Studio on X, they received only 27.75 million yen out of the total 55 million yen from Ubgoe, equating to roughly $170,000.

Last week, Jiro Ishii, accompanied by his legal counsel Takahiro Kasagi, provided additional insights into the predicament during an interview. Ishii disclosed that Ubgoe was contractually obligated to transfer the full sum by September 1, 2025, a deadline they failed to meet. Upon Ishii's inquiry the following day, Ubgoe's CEO, Kazua Okada, purportedly stated that the funds had been "mistakenly wired to a different client."

Subsequently, at Ishii's insistence, Okada reportedly signed a memorandum promising Ubgoe would remit the outstanding balance by September 16. However, only a partial amount was transferred by this new deadline. Ishii reports that Okada attributed this delay to the mistaken transfer not yet being recovered. Yet, when requested to provide proof, Okada consistently declined to present the transaction details or the originating account to Ishii and Kasagi.

Ishii further elaborated that Okada eventually displayed the account, but crucial transaction numbers were obscured, reinforcing Ishii's suspicion of being deceived. Furthermore, Kasagi highlighted that standard business practice in such situations involves initiating a transfer reversal with the bank, making him doubt Okada's assertion that the funds could not be retrieved.

The complexity of the situation is amplified by Ubgoe's terms and conditions, which stipulate that Skeleton Crew Studio, rather than Ubgoe, bears the responsibility for meeting commitments to backers. Ishii admitted he was unaware of this clause when the issue first arose. "I didn't realize that the project owner would be liable if the collection agency misappropriated the funds," Ishii stated. "I suppose I was operating under the assumption of inherent good faith."

Fortunately, the development of Shibuya Scramble Stories is not expected to be further impacted, as the project's completion has been secured through support from Toyku Land Corporation. Despite this, Ishii remains determined to pursue legal recourse against Ubgoe to ensure the outstanding funds are ultimately paid in full.