Sony in Negotiations to Acquire Kadokawa Given «Elden Ring» Success

Sony Group Corporation is reportedly in discussions to acquire Kadokawa Corporation, a prominent Japanese media conglomerate. The potential acquisition aims to bolster Sony’s entertainment offerings, especially following the success of the «Elden Ring» video game, according to two sources familiar with the negotiations.

The talks between Sony and Kadokawa are ongoing, and should they prove successful, an agreement may be finalized in the coming weeks, the sources indicated. Sony has declined to provide a statement regarding the negotiations, while Kadokawa also refrained from commenting.

Kadokawa’s shares were noted to be bid-only at the daily limit price of 3,745 yen, indicating investor anticipation surrounding the discussions. Sony currently holds a 2% stake in Kadokawa and has further investment in FromSoftware, a Kadokawa subsidiary renowned for developing «Elden Ring,» a fantasy role-playing game that is a collaboration between veteran director Hidetaka Miyazaki and «Game of Thrones» author George R.R. Martin.

Kadokawa, originally founded as a publishing company in 1945, has significantly expanded its activities into anime, games, and other media franchises, including notable titles such as «Re:Zero.» The company’s market capitalization stood at approximately $2.7 billion preceding the Reuters report.

Sony, historically recognized for its invention of the Walkman, has evolved into a formidable presence in the realms of movies, music, gaming, and technology. Sony CEO Kenichiro Yoshida has emphasized the importance of investing in intellectual property with lasting appeal, stating, «Loveable characters and intellectual property (IP) can live for 30, 50 or 100 years.»

The global growth of anime, significantly fueled by the proliferation of streaming services and increased cultural familiarity, aligns with Sony’s strategic interests. The company, which boasts a market valuation of about $114 billion, recently withdrew from a $10 billion merger of its Indian division with Zee Entertainment Enterprises, reflecting its ongoing focus on strategic investment opportunities.