Sony is in discussions to acquire Kadokawa, the Japanese media company behind the blockbuster video game Elden Ring, according to two sources familiar with the matter. The deal, if finalized, could be signed in the coming weeks, signaling Sony‘s ambition to bolster its entertainment portfolio.
Kadokawa’s shares surged 23%, hitting their daily trading limit after news of the talks broke. The company’s market capitalization stood at $2.7 billion before the announcement. While Sony declined to comment on the potential acquisition, Kadokawa stated it could not discuss the matter.
Sony, which already holds a 2% stake in Kadokawa and an interest in its subsidiary FromSoftware, appears poised to deepen its investment. FromSoftware developed Elden Ring, a fantasy role-playing game co-created by director Hidetaka Miyazaki and Game of Thrones author George R.R. Martin. The game has sold 25 million units worldwide, with its recent expansion, Shadow of the Erdtree, moving 5 million units within three days of its June release.
Founded in 1945 as a publishing house, Kadokawa has diversified into games, anime, and merchandise. Its properties include Re, a franchise spanning novels, anime, and figures, and Delicious in Dungeon, a manga adapted into an anime series.
Sony’s CEO Kenichiro Yoshida has emphasized the long-term value of intellectual property, stating, “Loveable characters and IP can live for 30, 50, or 100 years,” as part of the company’s strategy for sustainable growth. This aligns with Sony’s broader focus on anime, which has seen increased global demand due to streaming platforms and growing interest in Japanese culture.
Sony’s transformation from an electronics manufacturer to an entertainment powerhouse has included successes like adapting The Last of Us video game series into a hit HBO drama. Its entertainment portfolio spans movies, music, games, and technology, with a market valuation of approximately $114 billion.
However, Kadokawa’s recent challenges include a June cyberattack that disrupted operations and a scandal in 2022 when its former chairman faced bribery charges related to the Tokyo Olympics. Despite these hurdles, Kadokawa’s rich IP catalog makes it an attractive target for Sony as it seeks to expand its foothold in anime and gaming.
