Experts weigh in on Sony’s attempts to acquire Kadokawa Corporation, and in turn Elden Ring developer FromSoftware, and numerous anime and manga studios. However, they warn Sony may be forced to buy the entirety of the company, instead of just smaller elements, and for a cost they can’t afford, although their business rivals know they need it.
As previously reported, reports claimed that Sony was interested in acquiring Japanese media conglomerate Kadokawa Corporation. The company later confirmed that a letter of interest had been sent by Sony. The acquisition would give Sony control of many gaming, anime, and manga IPs via their respective studios. This includes Elden Ring (FromSoftware), Dragon Ball Sparking! ZERO (Spike Chunsoft), and more.
Further, Sony owns Funimation and Crunchyroll, which would give them control over an anime from its inception, all the way through to western localization, along with a larger cut of profits. However, it may not be smooth sailing, as Bloomberg’s Takashi Mochizuki reports both Sony and Kadokawa may want very different things from the sale.
Kadokawa reportedly wants everything to be sold, or not at all. Meanwhile, Sony only wants to acquire specifics assets from gaming, anime, and manga. The latter’s value has slightly dipped due to recent scandals (rising again thanks to news of the acquisition), while Sony wants to have more IP to support its various entertainment ventures. Mochizuki reports that if successful, Sony would make “billions of dollars in revenue for years to come.”
Even so, the initial cost to acquire all of Kadokawa may be too much. Toyo Keizai (a news outlet focusing on Japanese politics, economics and business) reports that Macquarie Capital Securities estimated the bid would be ¥640 billion JPY (an estimated $4.3 billion USD).
In their mid-term management plan for FY2026, Sony reportedly had an investment limit of ¥1.8 trillion JPY ($12 billion USD). But, Sony are also acquiring the rights to Pink Floyd and Queen for “tens to hundreds of billions of yen.” Variety reports the Queen acquisition alone cost $1 billion (¥150 billion JPY), almost 23% of the hypothetical Kadokawa bid.
Toyo Keizai notes that in addition to acquiring gaming studios, Sony “does not have a large amount of money in its pocket.” They further highlight “Sony has also been named as a buyer in a number of acquisition deals this year alone, but has abandoned them mainly because of price.” Despite this, they highlight the fact Sony could increase their 15% shares in Kadokawa to 50%, rather than total ownership from the start.
This isn’t including the various pitfalls that come from acquisitions. These range from rival buyers charging in and causing a bidding war that sends Kadokawa’s value out of Sony’s reach onto initial low-ball offers meant to start negotiations being taken as an insult. Studios also might not get along with the new bosses, among other concerns beyond a layman’s scope.
Sony are surely fiending to acquire Kadokawa, following numerous high-profile bombs such as Concord and layoffs. Ampere Analysis Research Director Piers Harding-Rolls explained to IGN how the acquisition would be a natural fit. He explained that in 2022, Sony acquired 14% of FromSoftware, “following up on its long-time collaboration with the company.”
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“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,” Harding-Rolls elaborated.
“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,” Harding-Rolls emphasized.
“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.”
In short, at a time where Sony is vulnerable, they are reaching for the ideal life-line. One that could be out of their reach, or drift out of reach thanks to waves made by business rivals.