Sony from Software invested 50 billion yen (about $318 million) in parent company Kadokawa, putting the brakes on a full takeover for now.
With the investment, Sony became Kadokawa’s largest shareholder with 10% of the company’s shares. Chinese megacorp Tencent is next in-line.
Kadokawa and Sony describe the pairing as a ‘strategic capital and business alliance’, aimed at growing Kadokawa’s long list of intellectual properties globally.
The deal announcement included vague corporate talk 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 worldwide, co-producing anime works and more. Kadokawa Games Release.
That line in particular has already sparked speculation that Sony could help realize a live-action Elden Ring movie or some sort of TV series, but it’s worth noting that most of Sony’s interest in Kadokawa is related to 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 produces a wide range of IP including publications and books, such as light novels and comics, as well as games and anime. .
“Combining Kadokawa’s extensive IP and IP creation ecosystem with Sony’s strengths in promoting the global reach of a wide range of entertainment, including anime and games, we plan to work together to realize Kadokawa’s ‘Global Media Mix’ strategy, aiming to maximize the value of its IP and Sony’s long-term vision, the ‘Creative Entertainment Vision.'”
Last month, financial experts said the PlayStation maker might pull the plug on the deal because of the cost of acquiring all of Kadokawa, rather than the parts it’s actually interested in.
Kadokawa was only interested in a deal with Sony if it bought the entire company. However, Sony was only interested in “extracting” assets related to anime and video games, which probably included the developer of Elden Ring.
According to expert estimates, it would cost 640 billion yen (about $4.3 billion) to buy all of Kadokawa. Sony’s cash for acquisitions is apparently tight at the moment due to investments elsewhere. As a point of comparison, Sony bought Destiny developer Bungie in 2022 for $3.7 billion. The studio has since suffered multiple layoffs and project cancellations.
There is also the apparent possibility of a bidding war, or the possibility of Sony buying 50% of Kadokawa and turning it into a non-wholly-owned subsidiary.
Kadokawa’s business expands into areas that fit Sony’s broader entertainment offerings, including anime, manga, TV and film. Kadokawa is one of the largest publishers of anime, and Sony already owns anime streamers Crunchyroll and Funimation. In addition to From Software, Kadokawa owns Danganronpa developer Spike Chunsoft, Octopath Traveler developer Aquare, and RPG Maker and Pixel Game Maker developer Gotcha Gotcha Games. Kadokawa owns the majority of From Software, about 70% of the company. Sony already owns about 14% of the developer, while Tencent owns about 16%
As for Sony, its gaming business has already seen significant layoffs and multiple studio closures this year, including Concord Developer Firewalk. In February, It announced a round of layoffs Affecting 900 employees, or about 8% of its global PlayStation workforce. The layoffs affected several PlayStation studios, including Insomniac, Naughty Dog, Guerrilla, and Firesprite, but PlayStation’s London studio was hit the hardest with notices of closure.
As for From Software, it is working on the multiplatform Elden Ring spin-off Elden Ring Nitrin, which is due out next year.
Update: An earlier version of this story claimed that Sony became Kadokawa’s majority shareholder, when in fact it became the largest. An edit has now been made. We apologize for the error.
Wesley is IGN’s UK News Editor. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or privately at wyp100@proton.me.
