Overseas reactions to reports that Sony is in negotiations to acquire Kadokawa, with people speculating that the main purpose is to acquire FromSoftware, the subsidiary that created 'ELDEN RING'



On November 19, 2024,

it was reported that Sony was planning to acquire Kadokawa, which develops anime, movies, and games. The next day, Kadokawa's stock price rose by nearly 46%, causing confusion, but several media outlets have speculated that 'they may be aiming to get their hands on the game studio.'

Exclusive: Sony is in talks to buy media powerhouse behind 'Elden Ring' | Reuters
https://www.reuters.com/markets/deals/sony-talks-buy-media-powerhouse-behind-elden-ring-sources-say-2024-11-19/

Sony Could Acquire FromSoftware's Owners In Most Annoying Attempt to Make Bloodborne Remaster Real
https://gizmodo.com/sony-could-acquire-fromsoftwares-owners-in-most-annoying-attempt-to-make-bloodborne-remaster-real-2000526314

Kadokawa owns 70% of FromSoftware, the company behind popular titles such as Elden Ring, while Sony owns 2% of Kadokawa and 14% of FromSoftware. By acquiring Kadokawa, Sony will have an absolute majority, which is why overseas media outlets such as Gizmodo have speculated that 'In effect, FromSoftware could become a PlayStation-first company.'

KADOKAWA has made Acquire, known for 'Tenchu' and other games, a wholly owned subsidiary, and indirectly owns Spike Chunsoft, the developer of the 'Furai no Shiren' series, as a consolidated subsidiary.

If KADOKAWA, which handles not only games but also anime and other entertainment in general, comes under Sony's umbrella, Sony will gain sovereignty over many areas.



Reuters pointed out that 'Sony CEO Kenichiro Yoshida said, 'Beloved characters and intellectual property can live on for 30, 50, or 100 years. We want to invest in them for sustainable growth.'' GIZMODO quoted Yoshida and said, 'Sony is looking to enter more anime markets and acquire more media franchises.' GIZMODO also cited Microsoft's acquisition of Activision Blizzard, saying, 'Another monopolistic move by a major company could have a serious impact on FromSoftware's work.'

Sony is going through a tough time in its gaming business, with the company

closing the development studio for the game 'CONCORD,' which was discontinued two weeks after its release, as well as laying off 100 employees at its game studio Bungie and laying off 900 employees at Sony Interactive Entertainment in February 2024. Cryptopolitan , a foreign media outlet, points out that 'this deal could bring positive prospects for Sony's future as it faces several setbacks.'

Meanwhile, KADOKAWA also stated in its financial results report dated November 7, 2024 (PDF file) that FromSoftware's 'ELDEN RING' main game and DLC contributed significantly to increased revenue. In addition, the company said it is expanding its development and publishing pipeline and is preparing a system to consistently introduce new games across the group.

Furthermore, Kadokawa has a large amount of IP (intellectual property) such as anime and games, and has stated that it aims to continuously improve its profits by realizing the expansion and longevity of each of its works, while also planning works that have the potential to become major hits, mainly based on original works, and by promoting high production quality and in-house production. For these reasons, some see the acquisition agreement as beneficial for both parties.



Push Square points out that Kadokawa's largest shareholder is a Korean company , and that 'there's been speculation online that Kadokawa wants to continue as a Japanese organization. While this has not been proven, it may help explain why Kadokawa is suddenly willing to negotiate with Sony.'

Reuters, which first reported the matter, said that if the talks are successful, a deal could be signed within weeks.

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