Kadokawa Corporation, the parent company of Elden Ring developer FromSoftware, confirmed Sony's intent to acquire them last week. Kadokawa CEO Takeshi Natsuno confirmed the news in a press release on November 20th, stating that the company had received an initial letter of intent from Sony Group Inc. to acquire all of Kadokawa's shares.

Today, Bloomberg has shed more light on the matter. Kadokawa and Sony have reportedly been discussing an acquisition for several years. Sony is only interested in "strategic investments" in Kadokawa's anime and video game properties. Kadokawa, meanwhile, wants Sony to acquire them outright fully. Bloomberg also adds that Microsoft, Tencent, and South Korea's Kakao Corp. are interested parties in acquiring Kadokawa in various capacities.

Founded in 1945, Kadokawa Corporation is a Japanese media conglomerate best known for its anime portfolio. While FromSoftware is their most famous game developer, Kadokawa owns Acquire (Tenchu, Way of the Samurai), Spike Chunsoft, Gotcha Gotcha Games, and FromNetworks.

They also own Kadokawa Daiei Studio, one of Japan's largest film studios, and NicoNico Douga, one of Japan's largest streaming platforms. Their entire portfolio is enticing, but Sony is only interested in their anime and gaming libraries.

The recent news about Kadokawa is complicating Sony's acquisition plans. Kadokawa's market value has increased to $4.1 billion. For comparison's sake, Sony purchased Bungie for $3.7 billion in 2022. Of course, that pales in comparison to Microsoft's $7.5 billion purchase of Bethesda and the absolutely massive $68.7 billion acquisition of Activision Blizzard King.

2024 has been a year of studio closures and layoffs for Sony. In February, they cut 8% of the PlayStation workforce. PlayStation's London Studio was shut down as part of these layoffs. More recently, the Firewalk studios, the team behind live-service flop Concord, was shut down entirely.

Choosing to acquire a proven studio like FromSoftware is one way to improve your company's bottom line over taking a risk on expensive live-service games, but I'd argue that if you have $4 billion to spend, you can prevent these massive shutdowns.

Posted: 4 hours, 23 minutes ago
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Source: https://www.dualshockers.com/fromsoftware-parent-company/