Remember Project Phoenix? It was a 2013 Kickstarter project which raised a whopping $1,014,600 from 15,802 backers off the back of the lofty promise that it would unite Japan's RPG talent to create the ultimate real-time strategy title.

In 2015 director and project leader Hiroaki Yura revealed that the game had been delayed, and earlier this year explained that he would be making another game with his studio AREA 35 to raise funds needed to finish Project Phoenix. That game is Tiny Metal, an Advance Wars-style strategy game which is due for release on Switch.

Tiny Metal was supposed to launch this month but has now been delayed until December 21st, but that's not the only bad news related to the title - former AREA 35 employee Tariq Lacy has issued a statement which accuses Yura of embezzling funds from Project Phoenix's crowdfunding campaign to produce the game. 

Lacy - who worked as a PR manager on Tiny Metal - posted the following message on the Project Phoenix Facebook page:

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 minimize 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.

The post was deleted, but not before it was seen by backers. Yura has now fired back with this own worrying allegations regarding Lacy's conduct, and that he has witnesses to back up his viewpoint:

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. 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.

Lacy has since refuted these claims to Kotaku, saying:

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.

Yura has since clarified what happened to the Project Phoenix funds, pointing out that all of the Kickstarter budget went into the poorly-received alpha build and he has since used his own money - accrued from working on external projects, such as Square Enix's I Am Setsuna - to continue development:

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. 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.

It seems like this particular argument is going to run and run, with neither side willing to back down. Whatever happens, this spat is likely to hang over the release of Tiny Metal, which is shaping up to be the Advance Wars game we've always wanted - which is a bit of a shame.