Sony Becomes Majority Shareholder in FromSoftware Parent Kadokawa, No Full Takeover for Now
Sony has invested 50 billion yen (approx. $318 million) in FromSoftware parent company Kadokawa, putting the brakes on a full takeover for now.
With the investment, Sony becomes the largest shareholder in Kadokawa, with 10% of the company’s shares. Chinese megacorp Tencent is next in-line.
Kadokawa and Sony have formed what the pair described as a ‘Strategic Capital and Business Alliance,’ with the goal to boost Kadokawa’s long list of intellectual properties globally.
The announcement of the deal includes vague corporate speak about how the two companies plan to work together in the future, but there is a line about adapting Kadokawa’s IP into live-action films and TV dramas globally, co-producing anime works, and further expanding the publishing of Kadokawa’s games.
That line in particular has already sparked speculation that Sony may help realise a live-action Elden Ring movie or TV series of some kind, but it’s worth pointing out that much of Sony’s interest in Kadokawa has to do with its anime business, as opposed to its video game business.
Sony boss Hiroki Totoki commented: “Through this capital and business alliance, we will become the largest shareholder of Kadokawa, which consistently creates a wide variety of IP, including publications and books, such as light novels and comics, as well as games and anime.
“By combining Kadokawa’s extensive IP and IP creation ecosystem with the strengths of Sony, which has promoted the global expansion of a wide range of entertainment, including anime and games, we plan to work closely together to realize Kadokawa’s ‘Global Media Mix’ strategy, aimed at maximizing the value of its IP, and Sony’s long-term vision, ‘Creative Entertainment Vision.'”
Last month, financial experts said the PlayStation maker might have been put off the deal due to the cost of having to acquire all of Kadokawa, rather than the parts it was actually interested in.
Kadokawa was reportedly only interested in doing a deal with Sony if it bought the entire company. Sony, however, was reportedly only interested in “extracting” assets related to anime and video games, which presumably included the developer of Elden Ring.
Buying all of Kadokawa would cost 640 billion yen (approx $4.3 billion), according to expert estimates. Sony’s cash for buyouts is apparently tight at the moment due to investments made elsewhere. As a point of comparison, Sony bought Destiny developer Bungie for $3.7 billion back in 2022. The studio has since suffered multiple rounds of layoffs and project cancelations.
There’s also the apparent prospect of a bidding war, or scope for Sony to buy 50% of Kadokawa and turn it into a subsidiary it doesn’t wholly own.
Kadokawa’s business extends into areas that fit into Sony’s broader entertainment offering, which includes anime, manga, TV, and film. Kadokawa is a prolific publisher of anime, and Sony already owns anime streamers Crunchyroll and Funimation. As well as FromSoftware, Kadokawa owns Danganronpa developer Spike Chunsoft, Octopath Traveler developer Acquire, and RPG Maker and Pixel Game Maker developer Gotcha Gotcha Games. Kadokawa is the majority owner of FromSoftware, with around 70% of the company. Sony already owns around 14% of the developer, with Tencent owning around 16%.
For Sony, its gaming business has already suffered significant layoffs this year and the closure of multiple studios, including Concord developer Firewalk. In February, it announced a round of layoffs affecting 900 staff, or about 8% of its global PlayStation workforce. The layoffs impacted a number of PlayStation studios, including Insomniac, Naughty Dog, Guerrilla, and Firesprite, but PlayStation’s London studio was hit hardest with a notice of closure.
As for FromSoftware, it’s working on multiplatform Elden Ring spin-off Elden Ring Nightreign, which is due out next year.
UPDATE: A previous version of this story claimed Sony had become the majority shareholder of Kadokawa, when in fact it has become the largest. An edit has now been made. We apologize for the error.
Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
