Sony Increases Stake in FromSoftware's Parent Company Kadokawa

Sony and Kadokawa jointly announced that they intend to work even more closely together in the future. The alliance will be solidified by Sony's purchase of additional Kadokawa shares, making it the largest shareholder.

Neither side mentioned a complete takeover when the new alliance was announced. This is interesting in that Reuters reported Sony's purchase intentions in November and Kadokawa later confirmed corresponding talks. Now it seems that an agreement has been reached elsewhere.

Sony is buying new Kadokawa shares worth 50 billion yen, increasing its stake in the Japanese entertainment group to 10 percent. This makes Sony the largest shareholder in Kadokawa.

The games industry views the deal primarily with an eye to the Japanese developer and publisher FromSoftware, which has repeatedly landed global hits in recent years, including “Elden Ring”. Sony and the Chinese company Tencent had bought shares in From Software in 2022, but Kadokawa remained FromSoftware's largest shareholder.

FromSoftware is perhaps the most exciting part of Kadokawa from a gaming perspective, but the company also has numerous subsidiaries and holdings in the book and magazine, film and digital media sectors. Spike Chunsoft, for example, is just as much a part of Kadokawa as Kadokawa Anime, Glovision or Enterbrain, the publisher behind the internationally renowned games magazine Famitsu.

Accordingly, when Sony and Kadokawa announced their business alliance, they referred in rather general terms to various projects and IPs on which they would like to work together. Among other things, the alliance will seek to expand Kadokawa IPs to include life-action films and TV series, co-produce animes, and expand the global distribution of Kadokawa products through the Sony Group.

"We are very pleased to conclude this capital and business alliance agreement with Sony. This alliance is expected to not only further strengthen our IP creation capabilities, but also increase our IP media mix options with Sony's support for global expansion, allowing us to deliver our IP to more users around the world. We are confident that this will greatly contribute to maximizing the value of our IP and increasing our corporate value in the mid- to long-term. We intend to do our utmost to ensure that our collaborative efforts with Sony produce great results in the global market," says Takeshi Natsuno, CEO of Kadokawa Corporation.

And Hiroki Totoki, President, COO and CFO Sony Group, adds: "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 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.'"