According to media reports this week, Sony Group Inc. is in talks to acquire fellow Japanese conglomerate Kadokawa. The company’s anime and gaming characteristics may underlie potential M&A activity.
KADOKAWA is a 79-year-old company that is involved in a wide range of films, games, publishing, and animation, and is listed on the Tokyo Stock Exchange. The company’s shares soared about 23% on Tuesday after Reuters published a report on the talks, citing two anonymous sources.
contact address varietySony declined to comment. Kadokawa has not responded so far.
Hostile takeovers are extremely rare in Japan. And if negotiations are progressing, the most likely outcome is either a deal is reached or the negotiations break down. However, Japanese commentators have already begun to question whether Sony will seek to acquire the entire Kadokawa Group or extract its anime and gaming businesses.
Sony’s senior management has made no secret of its ambitions to expand through acquisitions in the games, video and music entertainment sectors. The medium-term strategic plan calls for the group to own more intellectual property and increase its presence in the anime field. Sony already owns a 2% stake in Kadokawa, and Kadokawa claimed in a recent “integrated report” that it controls the rights to 130,000 books and 2,000 videos.
Sony acquired the Crunchyroll streaming platform in 2021 and integrated it with its own Funimation operations, making it a major player in Japanese animation. The company’s Sony Music Entertainment Japan division runs Aniplex, one of the production companies behind the blockbuster movie “Demon Slayer” and TV series. Aniplex also owns animation studios A-1 Pictures and CloverWorks.
Kadokawa controls 70% of FromSoftware, the developer of action role-playing games Elden Ring, Dark Souls and the Armored Core game series. There is also a PlayStation exclusive game title “Bloodborne”. Minority shareholders in the division include Sony with 16% and China’s Tencent with 14%.
On the publishing side, Kadokawa has Key-Process (ASCII Media Works, Enterbrain, Fujimi Shobo, Media Factory), KADOKAWA Game Linkage (publishes B’s-LOG, Comptique, Dengeki Nintendo, Weekly Famitsu), and J-Novel Club. , Yen Press. It also owns Walker’s newspaper and web publishing business and the Anime News Network.
Kadokawa’s animation activities include the recently acquired Douga Kobo, Studio Kadan, Raging Bull, and Bellnox Film. Additionally, they are affiliated with Kinema Citrus and Studio Chizu.
In movies, the company currently has 10 to 15 projects in development. At this year’s film awards, he received attention as the Japanese partner in director Kiyoshi Kurosawa’s Japanese-French co-production “The Snake’s Way,” a remake of his own 1998 revenge thriller. Last year, it finished second to Takeshi Kitano’s Cannes Competition title “Kubi.”
