Sony has purchased 50 billion yen (AUD $509 million) worth of shares in Kadokawa Corporation, becoming the largest shareholder in the company. As announced, this is part of a “strategic capital and business alliance agreement” that will see Sony and Kadokawa working closely together in future.
Notably, this is not the acquisition of Kadokawa that was initially rumoured. Sony has actually claimed it “does not plan to acquire additional Kadokawa shares after the execution of the acquisition,” indicating the companies will remain seperate, but will work towards shared interests.
With this share purchase, Sony will now hold 10% of Kadokawa’s shares, and will therefore have some sway in business decisions. Per Sony, this move will allow both companies to “maximise” their IP value globally and “facilitate wider and deeper collaboration” including potential joint investments in “the content field, joint discovery of new creators, and joint promotion of further media mixes of both companies’ IP.”
For reference, Kadokawa owns a range of IP through various business branches. On the games side of things, it owns FromSoftware (Elden Ring, Dark Souls), Acquire, and Spike Chunsoft. It also owns a range of manga, anime, and TV production companies.
Read: Sony is officially in talks to acquire FromSoftware owner Kadokawa
In its press release, Sony particularly noted Kadokawa’s plans to adapt its IP into live-action films and TV dramas, suggesting it could help to co-produce these works, and expand their global distributing. It also has an interest in expanding publishing of Kadokawa’s games, and developing human resources “to promote and expand virtual production.”
Speaking of the share increase, both Sony and Kadokawa expressed anticipation for how this move would expand the capabilities of both companies, without a need for formal acquisition.
“This alliance is expected to not only further strengthen our IP creation capabilities, but also increase our IP media mix options with Sony’s support for global expansion, allowing us to deliver our IP to more users around the world,” Takeshi Natsuno, CEO of Kadokawa said. “We are confident that this will greatly contribute to maximising the value of our IP and increasing our corporate value in the mid- to long-term.”
“By combining Kadokawa’s extensive IP and IP creation ecosystem with the strengths of Sony, which has promoted the global expansion of a wide range of entertainment, including anime and games, we plan to work closely together to realise Kadokawa’s ‘Global Media Mix’ strategy, aimed at maximising the value of its IP, and Sony’s long-term vision, ‘Creative Entertainment Vision,'” Hiroki Totoki, President, COO and COO of Sony Group Corporation said.
For now, we’ll have to wait to see how this alliance works, and whether it will be as transformative as its press release suggests. As of publication, Sony noted it would not have any material impact on its financial results for the financial year ending March 2025.
