TL;DR:
- Sony is negotiating to acquire Kadokawa, the media giant behind the acclaimed game Elden Ring.
- Kadokawa shares surged 23% following the news, pushing its market cap to approximately $2.7 billion.
- Sony, already holding a 2% stake in Kadokawa, aims to expand its entertainment portfolio through this acquisition.
- The deal could be finalized in the coming weeks as both companies have declined to comment on the ongoing negotiations.
Japanese technology giant Sony Group Corporation is in negotiations to acquire Kadokawa Corporation, the media powerhouse behind the critically acclaimed video game “Elden Ring” and numerous popular anime franchises. The potential acquisition could be finalized in the coming weeks, according to sources familiar with the matter.
The news sent Kadokawa’s stock soaring, with shares closing up 23% at their daily limit. The company’s market capitalization stood at approximately $2.7 billion before the announcement.
Sony already maintains a 2% stake in Kadokawa and holds shares in its subsidiary FromSoftware, the developer responsible for “Elden Ring.” The fantasy action role-playing game, created in collaboration between game director Hidetaka Miyazaki and “Game of Thrones” author George R.R. Martin, has sold an impressive 25 million units worldwide.
Kadokawa’s portfolio extends far beyond gaming. Founded in 1945 as a publishing house, the company has evolved into a multimedia empire encompassing video games, anime production, and entertainment events. Notable properties include the popular anime series “Re:Zero” and “Delicious in Dungeon.”
For Sony, this potential acquisition aligns with CEO Kenichiro Yoshida’s strategic vision. “Loveable characters and intellectual property can live for 30, 50 or 100 years,” Yoshida stated last year. “That’s something we want to make investment in for sustainable growth.”
The deal would significantly bolster Sony’s entertainment division, which has successfully expanded beyond its electronics manufacturing roots into movies, music, games, and semiconductor production. The company has demonstrated particular success in cross-media adaptation, as evidenced by the acclaimed HBO series based on their game franchise “The Last of Us.”
Recent years have presented challenges for Kadokawa, including a significant cyberattack in June 2024 that resulted in data breaches and disrupted business operations. The company also faced controversy when former chairman Tsuguhiko Kadokawa stepped down following bribery charges related to the Tokyo Olympics.
Both Sony and Kadokawa have declined to comment on the ongoing negotiations.
Source: Reuters
