With Microsoft making waves through massive gaming acquisitions, Sony might be planning its own bold move to reshape the industry. Could this be the next big power play in the console wars?
Sony is reportedly in talks to acquire Kadokawa Corporation, the parent company of FromSoftware, in a strategic move to strengthen its presence in gaming and entertainment.
Currently, Sony owns 14% of FromSoftware and 2% of Kadokawa, and this potential acquisition could enhance its foothold in the anime and gaming sectors while securing exclusive content and partnerships.
What is Kadowaka?
Kadokawa is a prominent Japanese multimedia company involved in anime, books, manga, video games, and film production.
Sony is trying to buy Kadokawa. To put this into perspective, they currently own Funimation, Crunchyroll and Rightstuf. For the last half decade they have been buying up the Anime and Manga market to gain a monopoly.If they aquire Kadokawa. They won't just own major Light... pic.twitter.com/7l46Q6GrJv
— Chibi Reviews (@ChibiReviews) November 19, 2024
It is particularly well-known for owningFromSoftware, the studio behind global hits like Elden Ring and Dark Souls. The company also owns other studios such as Acquire, creators of Octopath Traveler.
Reasons for Sony's Interest
- Blockbuster Success: FromSoftware, a cornerstone of Kadokawa’s gaming portfolio, has sold over 25 million copies of Elden Ring. Kadokawa owns 70% of the studio, while Tencent holds 16%, making it a valuable asset. Acquiring Kadokawa would allow Sony to secure long-term collaboration with FromSoftware while reducing competition from rivals like Tencent and Microsoft.
- Cross-Media Synergy: Kadokawa excels in anime, manga, and publishing. By integrating these assets, Sony could advance its vision of unifying gaming, anime, and storytelling franchises under its umbrella. This cross-media approach aligns with Sony’s broader strategy to create interconnected entertainment ecosystems.
- Competitive Advantage: With Microsoft expanding its gaming influence through the acquisition of Activision Blizzard, Sony is under pressure to secure its competitive position. Kadokawa’s wide-ranging portfolio and expertise could help Sony stay ahead in the gaming industry.
Now we know how Sony is using that Xbox revenue, they're using it to buy Kadokawa. pic.twitter.com/O68wt70qCA
— Tripster (@TRIPSTER0) November 19, 2024 - Exclusivity and Market Defense: The acquisition would ensure some of the industry’s most lucrative IPs and content remain exclusive to Sony platforms, reinforcing the PlayStation brand's dominance.
Price Speculation
While no specific numbers have been confirmed, industry analysts expect the deal to be valued in the tens of billions of dollars.
Given Kadokawa’s market size and its dominant position in multiple entertainment sectors, the acquisition could rival or approach the scale of Microsoft’s Activision Blizzard deal of $86.7 billion.
Can everyone calm down? Sony ain't Microsoft. They can't afford Kadokawa. Chill.#Xbox #PlayStation #PS5Pro #Concord #Nintendo #PC #Twitch #gaming pic.twitter.com/8NKrnS80yC
— L.B. Jr. (@leebrightjr) November 19, 2024
Even if Kadokawa's market capitalization is ‘only’ 3-5 billion dollars, a deal would be far more expensive, as Sony would also have to buy the shares in FromSoftware and Acquire.
While Kadokawa operates on a smaller scale compared to Activision Blizzard, its diversified portfolio and cultural influence, particularly in Japan’s entertainment ecosystem, could still drive a high valuation.
How it started: "Microsoft could make things worse for Sony on their own Japanese home turf and acquire Square, Capcom, Atlus."How it's going: Microsoft closed its only Japanese studio (Tango Gameworks) and Sony is in talks to buy Japanese powerhouse Kadokawa (From Software) pic.twitter.com/wzOvBtcCoQ
— Oliver Darko (@oliver_drk) November 19, 2024
Looking Ahead
Neither Sony nor Kadokawa has commented on the acquisition rumors, but industry observers view this move as a bold step to counteract growing competition.
If successful, the deal could transform Sony’s entertainment strategy and strengthen its global market position.
Would you welcome this acquisition? What impact do you think it will have on the gaming and anime industries?
