Sony in Talks to Buy ‘Elden Ring’ Publisher Kadokawa, Say Reports

Sony Group Corporation is in talks to acquire fellow Japanese conglomerate Kadokawa, according to media reports that emerged this week. The firm’s animation and games properties may underlie the possible M&A activity.

Kadokawa is a 79-year-old company that spans film, games, publishing and animation and is listed on the main Tokyo Stock Exchange. Its shares soared some 23% on Tuesday after the Reuters news agency published a report about the negotiations, quoting two anonymous sources.

Contacted by Variety, Sony declined to comment. Kadokawa has not so far responded.

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Hostile takeover bids are extremely rare in Japan. And if talks are moving forward, the most likely outcomes would be either an agreed deal or collapsed talks. However, commentators in Japan have already started to ask whether Sony would attempt to buy the entire Kadokawa group, or to extract its anime and games businesses.

Sony’s senior management has not hidden its ambitions to expand through acquisition in its games, pictures and music entertainment sectors. And its medium-term strategic plan calls for the group to own more intellectual property and to grow its presence in anime. Sony already owns a 2% stake in Kadokawa, which claimed in a recent “integrated report” to control rights to 130,000 books and 2,000 videos.

Sony, which bought the Crunchyroll streaming platform in 2021 and merged it with its own Funimation operation, has become a major player in Japanese animation. Its Sony Music Entertainment Japan unit controls Aniplex, one of the producers behind the smash hit ‘Demon Slayer” film and TV franchise. Aniplex also owns animation studios A-1 Pictures and CloverWorks.

Kadokawa owns a controlling 70% stake in FromSoftware, the company behind action role-playing game “Elden Ring,” “Dark Souls” and the “Armored Core” games series. It also has “Bloodborne,” a PlayStation-exclusive game title. The unit’s minority owners are Sony with a 16% stake and China’s Tencent, with a 14% holding.

On the publishing front, Kadokawa has Key-Process imprints ASCII Media Works, Enterbrain, Fujimi Shobo, and Media Factory), KADOKAWA Game Linkage (which publishes B’s-LOG, Comptiq, Dengeki Nintendo and Weekly Famitsu), J-Novel Club, and Yen Press. It also owns the Walker paper and web publishing business and Anime News Network.

Kadokawa’s animation activities include recently acquired Doga Kobo, Studio Kadan, Raging Bull and Bellnox Films. It has further affiliations to Kinema Citrus and Studio Chizu.

In film, the company is currently developing 10-15 projects. This year’s movie slate saw it as the Japanese partner in private Franco-Japanese co-production “Serpent’s Path,” with Kurosawa Kiyoshi remaking his own 1998 revenge thriller. Last year it was behind Kitano Takeshi’s Cannes competition title “Kubi.”