Sony expressed its intent to acquire Kadokawa just over a month ago, a Japanese media powerhouse that also owns video game developers FromSoftware and Spike Chusoft. Sony and Kadokawa have now entered a "strategic partnership" that will see the former acquire a majority stake in Kadokawa's shares, roughly equivalent to 10% of the latter's total shares.
The companies confirmed the deal this week, which comes into effect from January 7, 2025. The deal won't have any "material impact" on Sony's consolidated financial reports for Q4 2024, ending on March 31, 2025. Sony is purchasing a total of 12,054,100 new shares of Kadokawa Corporation for 50 billion yen, or almost $320 million USD.
The deal will see Sony and Kadokawa work together to primarily adapt IP owned by the latter into live-action films and television shows. It also gives Sony the right to distribute and co-produce anime franchises owned by Kadokawa, essentially making the company the largest anime powerhouse in media.
"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," said Hiroki Totoki, president, COO and CFO of the Sony Group Corporation.
"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.'"
Sony already had a 14% stake in FromSoftware directly before this deal, and this deal all but confirms the company's intent to push for a transmedia strategy regarding Elden Ring and other games from its developers. Kadokawa also owns other major assets in the world of video games and anime, including the following:
- Acquire (Developed Octopath Traveler)
- FromNetworks
- FromSoftware (Elden Ring, Dark Souls)
- Gotcha Gotcha Games (RPG Maker)
- Spike Chunsoft (Danganronpa, Dragon Ball: Sparking! Zero)
- Re:Zero
- Delicious in Dungeon
- Sword Art Online
Many have speculated that Bandai Namco pushed FromSoftware to release the Elden Ring multiplayer spinoff early, and you'll be able to play Nightreign in February, long before the effects of the Sony partnership are felt.
"We are very pleased to conclude this capital and business alliance agreement with Sony," said Takeshi Natsuno, CEO of Kadokawa Corporation.
"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."
As for FromSoftware, its president Hidetaka Miyazaki has teased multiple projects in development, some of which are open to being locked to PlayStation consoles following the deal.
Some could see Sony's move as a retaliation against Microsoft, which also spent billions acquiring Activision Blizzard and Bethesda to build a robust library of well-known IP.
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