As reported in VGC, the veteran developer had updated both his Facebook and LinkedIn pages overnight (June 3), which show that his employment at the Japanese publisher ended in April.
Naka had joined Square Enix in 2018 to create new platformer Balan Wonderworld under a new studio named Balan Company.
He was also reunited with Sonic co-creator Naoto Ohshima, who designed the game characters and costumes, albeit via his own company Arzest.
However, the game released in March to overwhelmingly negative reviews, the poor reception having begun with a disappointing demo released in January. On Metacritic, scores range from 36 (Switch) to 51 (PS5).
Balan Wonderworld was also a commercial failure, where at the worst, it was played by just over 100 concurrent players on Steam at launch, according to SteamDB.
It was also blighted by a seizure-inducing bug, although this was fixed with a day-one patch.
Square Enix has since removed the game demo from all previously available digital storefronts.
In an interview with IGN, Naka had claimed that Balan Wonderworld was his “one chance” to create a new platformer game, which is also the first for Square Enix, who usually specialise in RPGs.
“I think Square Enix has an RPG image,” Naka said. “But I don’t think I’d be good at making RPGs.” The developer has however been involved in the making of RPGs like Phantasy Star and Phantasy Star Online in the past.
Square Enix has yet to comment on the news, and Naka has not indicated where he is headed next. Nonetheless, Sonic Colors is getting remastered, while a new Sonic game from Sonic Team has also been teased.