Sony is in talks to acquire Kadokawa, a Japanese media conglomerate that owns FromSoftware, the developer of the hit video game Elden Ringthey reported this Tuesday Nikkei and other means.
Nikkei He said negotiations “are in the early stages,” while Bloomberg He said Sony “has been studying a possible bid for Kadokawa and the two companies have held talks,” citing unnamed sources.
“Sony Group intends to obtain the rights to works and content through acquisitions, making its profit structure less dependent on successful titles,” he reported. Nikkei. “Owning the rights will allow the company to earn royalties when its songs are used in films and television shows, and when other artists perform its songs,” he added.
Kadokawa owns a 70% stake in FromSoftware. For its part, Sony’s video game division owns another 14% of the studio, and the rest is owned by a subsidiary of Tencent. Other video game developers owned by the group include Spike Chunsoft (Danganronpa, Dragon Ball: Sparking! Zero) y Acquire (Octopath Traveler, Mario & Luigi: Brothership).
Elden Ring arises from a collaboration between director and designer Hidetaka Miyazaki and fantasy novelist George RR Martin. The video game has sold 25 million units to date and has been widely praised, even winning video game of the year in 2022 during the Video Game Awards (VGA). An expansion of Elden Ring call Shadow of the Erdtreesold 5 million units within three days of its release in June. The expansion is also nominated for best video game of the year at the VGA 2024.
Kadokawa has much more to offer than video game studios, and Sony may have other motivations for the acquisition.
Kadokawa is a media giant known for producing anime and being a dominant manga publisher. The company owns properties such as Re:Zero y Delicious in Dungeonto mention a few.
The deal, if successful, would expand both the video game and anime portfolio of Sony, which acquired streaming service Crunchyroll in 2021, making it a dominant anime distributor outside Japan. Buying Kadokawa would be an important step toward further consolidation in this industry at a time when its global popularity is growing.
Both Sony and Kadokawa declined to comment, but Reuters has said the deal could close in the coming weeks.
Aming and anime portfolio, but there’s also a strategic element to consider. The gaming industry is becoming increasingly competitive, and acquiring Kadokawa could provide Sony with a unique edge through exclusive content. Additionally, the potential for multimedia adaptations of games into films or series can create new revenue avenues, which could be a significant motivator for this acquisition. Furthermore, securing popular IPs like those from FromSoftware can bolster Sony’s brand and attract more consumers to their ecosystem.
Sony is reportedly in talks to acquire Kadokawa, a Japanese media conglomerate that owns FromSoftware, the developer of the hit video game Elden Ring. The deal could potentially expand Sony’s portfolio in the video game and anime industries, as well as its revenue streams through royalties. To better understand the potential impact of this acquisition, we have interviewed two guests: Takashi Ohyama, Senior Analyst at SBI Securities, and Yuka Kinoshita, a well-known video game journalist.
Takashi, can you explain how such an acquisition could benefit Sony’s video game division?
Takashi Ohyama: Certainly, Sony has been aiming to reduce its reliance on major title releases for profitability, and acquiring a company like Kadokawa, which owns not only FromSoftware but also other game developers and properties, would help them diversify their revenue streams. Additionally, by owning the rights to intellectual property, they can earn royalties even when those properties are used in other media formats like films or TV shows. This could be especially valuable for underscoring the profitability of games as interactive experiences that are part of a larger entertainment ecosystem.
Yuka Kinoshita, as a video game journalist, what do you think are the potential benefits for the gaming industry if this acquisition goes through?
Yuka Kinoshita: This deal signals a significant consolidation in the gaming industry, with one of the world’s largest tech companies looking to acquire a major content creator. It could lead to more collaborations between Sony’s gaming division and Kadokawa’s diverse properties, potentially resulting in new game adaptations or original IPs developed exclusively for Sony platforms. Moreover, it could strengthen Sony’s presence in the anime industry, which is rapidly growing globally, and further position them as a major player alongside companies like Netflix and Crunchyroll.
Takashi, what do you think about the reported motivations behind this deal? Do you think it’s solely about expanding the gaming industry or could there be other factors at play?
Takashi Ohyama: I believe there are several factors at play here. Yes, Sony is looking to expand its g
