Kadokawa Corporation, the parent company of developer FromSoftware, best known for Elden Ring and the Dark Souls franchise, confirmed that Sony is in talks to buy them.
Reuters broke the story earlier this week, though both Kadokawa and Sony declined to comment at the time. While Sony has still not commented on the matter, Takeshi Natsuno, CEO of Kadokawa Corporation, announced the news:
There are some articles on the acquisition of KADOKAWA Corporation (hereinafter “the Company”) by
Sony Group Inc. However, this information is not announced by the Company. The Company has received an
initial letter of intent to acquire the Company’s shares, but no decision has been made at this time. If there are
any facts that should be announced in the future, we will make an announcement in a timely and appropriate
manner.
Kadokawa is the majority owner of FromSoftware, with a nearly 70% share. Sony already owns 14% of FromSoftware, and Chinese developer Tencent owns 16%.
Piers Harding-Rolls, Research Director for Ampere Analysis, spoke with IGN.
Sony’s interest in Kadokawa’s games publisher FromSoftware was made more concrete in 2022 when it acquired a roughly 14% share of the company following up on its long-time collaboration with the company.
At the time, Sony mentioned a broader interest in cross-media development of anime and games IP to support its other media businesses. So, in that sense any deal for the parent company Kadokawa, which also operates extensively in manga and anime, is a natural extension of this earlier deal. These other areas align nicely with Sony’s anime businesses.
The market conditions for acquisitions have changed dramatically over the last two years but Sony will always be looking for opportunities that can fuel its growth and that bolster its IP portfolio, and that represent value. There may also be a defensive element to this move. FromSoftware is an important partner for Sony’s games business, and it will not want a competitor taking control of Kadokawa and potentially disrupting that relationship. It helps that Kadokawa is also active in areas which are a strong fit with Sony’s wider business.
Sony has endured hardships this year in game development, having closed down several studios. Most recently, they shuttered Firewalk, the developer of the live service game Concord that notoriously bombed earlier this year. In February, they laid off 900 staff across their studios, translating to roughly 8% of their global PlayStation workforce. Bungie, another development studio owned by Sony, has also endured cuts this year.
Despite these cuts, Sony seems eager to invest in game development studios.
Shadow of the Erdtree, the DLC for Elden Ring, is nominated for several awards at this year’s TGAs, including Game of the Year.
