Sony is officially in talks to acquire Kadokawa Corporation, a major Japanese conglomerate that owns a range of subsidiaries, including Elden Ring studio FromSoftware, Spike Chunsoft (Dragon Quest, Pokemon Mystery Dungeon, Dragon Ball: Sparking! Zero), and – most ironically – Acquire (Octopath Traveler, Mario & Luigi: Brothership).
Kadokawa is also a major name in the anime and manga space, owning a range of media production companies (ENGI, Doga Kobo, EuropaCorp), as well as notable publishers like Yen Press (Sword Art Online, Delicious in Dungeon, Fruits Basket, Puella Magi Madoka Magica), which it co-owns with Hachette.
Per Reuters, Sony is looking to add to its entertainment portfolio, expanding an existing 2% stake in Kadokawa to acquire the company outright. Talks are ongoing, and a deal could be signed by the end of 2024. Responding to a Reuters inquiry, Sony declined to comment on the matter, and Kadokawa said it “cannot” comment.
Update 21/11: While Kadokawa initially declined to comment to Reuters, it subsequently released a statement confirming Sony has sent an initial letter of intent to acquire the company’s shares. At this stage, no decision has been made, and Kadokawa has promised that, “if there are any facts that should be announced in the future, we will make an announcement in a timely and appropriate manner.” We’ll likely hear the company’s final decision in due course.
Kadokawa’s potential Sony acquisition is a major concern
The news of a potential Kadokawa acquisition by Sony has not gone down well online, with many expressing concern about yet more acquisitions by a major company, after years of layoffs and downsizing caused by growing monopolies.
Fresh in the minds of many is the recent shutdown of Firewalk Studios, which was acquired by Sony in mid-2023, and shut down just over a year later, following the releasing of the poorly-received live service shooter Concord.
Read: Firewalk Studios has been shut down, Concord cancelled
Rival company Microsoft acquired Activision Blizzard in 2022, and then spent subsequent years initiating many rounds of layoffs, impacting thousands of employees.
While acquisitions don’t necessarily lead to significant restructures, we’ve seen this time and again in recent years, as companies cut hard-working staff to reduce the financial toll of acquiring multi-million dollar companies – usually to the detriment of their quality and output.
Should talks advance between Sony and Kadokawa, studios like FromSoftware may be put in more precarious positions. They may also be put under greater pressure – whether to perform well, or to operate under a new edict. In recent times, many of Sony’s acquired studios have been put to work on live service multiplayer games, as the company pursues the next “big hit” in the genre. Surely FromSoftware won’t be put to the same task, but we’ll just have to wait to see what’s in store.
Reuters believes a deal could be made imminently, should talks between Sony and Kadokawa go well, so more news is likely to arrive sooner, rather than later. Stay tuned.
