Sony eyes acquisition of FromSoftware parent Kadokawa, industry speculates impact

Sony is reportedly considering buying out Kadokawa, FromSoftware’s parent company. The multinational entertainment company is considering the acquisition to further bolster its extensive portfolio. Kodokawa’s acquisition is expected to dramatically affect the gaming and anime industries.

Since its establishment in the 1940s, Sony, the multinational company, has expanded and adapted itself to move beyond its consumer electronics business. The company’s evolution has seen it veer into entertainment and gaming with movies and the creation of PlayStation consoles.

In the same light, Sony has recently sought to expand its portfolio further with acquisitions that would boost its hold on entertainment and gaming while simultaneously diversifying its offerings. 

Sony eyes FromSoftware parent company Kadokawa

Sony has confirmed their interest in buying FromSoftware's parent company Kadokawa.

"It’s true that we have made an initial statement of intent. We would appreciate it if you would allow us to refrain from further comment."

(Source: Yahoo Japan) pic.twitter.com/o0RXSDYAB8

— TripleJump Gaming (@TeamTripleJump) December 12, 2024

As initially reported by Reuters, Sony has been eyeing a potential move to acquire Kadokawa, a Japanese media conglomerate. It was rumored that Sony would be in talks to facilitate the Kadokawa acquisition before the company confirmed the news.

The initial rumors were further solidified when Weekly Bunshun, a Japanese news site, shared the Japanese employee’s thoughts about the probable acquisition. Kadokawa is renowned for its role in film, publishing, and video game spheres. The Japanese conglomerate owns FromSoftware, the video game publisher behind the Souls and Elden Ring titles.

Kadokawa is also prominently featured in the anime world and has many intellectual properties. The company’s extensive manga and anime portfolios established it as a key player. Several Kadokawa anime adaptations, such as Oshi no Ko, have gone on to give it massive financial success and boost its reputation. The Japanese company has also engaged in more anime-related activities, such as production financing and merchandising, giving it substantial sway over the global anime market. 

Kadokawa’s acquisition is perceived to result in sweeping changes in the anime and gaming industries. Sony is expected to follow trends set by other major players like Microsoft, who acquired Activision-Blizzard in a deal worth $68.7 billion in 2023. The proposed deal is expected to help boost Sony’s hold on the Japanese market and other emerging markets. The entertainment company currently owns Crunchyroll and Funimation, and the deal would give it more IPs, establishing it as an anime powerhouse with global reach. 

Sony’s potential acquisition causes mixed reactions

News about the gaming empire acquiring Kadokawa resulted in a range of reactions from both gamers and industry players. Some Japanese employees under Kadokawa were critical of the deal and stated that it would severely impact the company’s independence.

Another section of employees said the acquisition was positive and would rejuvenate the company by improving discipline and removing incompetent staff members. In this context, Takeshi Natsuno, CEO of Kadokawa, was singled out for potential replacement if the acquisition went through. 

A veteran Kadokawa employee said:

“The employees around me are happy about Sony’s acquisition. That’s because there are a certain number of employees who are dissatisfied with the Natsuno administration, which did not even hold a press conference after personal information was leaked due to a cyber attack.”

Gamers also reacted to Kadokawa’s potential acquisition by Sony with mixed reactions. Some gamers stated that the acquisition would be a perfect fit for Sony and would give the game publisher the best chance to keep going amidst industry uncertainty and the current struggles facing the Japanese company.

However, another section of gamers expressed skepticism, fearing that the acquisition would make the Souls and Elden titles exclusive to Sony. 

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