Sony is expanding its entertainment business! According to Reuters, Sony is reportedly in talks with Japanese media giant Kadokawa for an acquisition and may reach a protocol in a few weeks.

After the news was exposed, Kadokawa's (TYO: 9468) stock price rose by 23% to a limit price of 3,745 yen on November 19, and the current market capitalization is approximately 2.7 billion US dollars (approximately 87.5 billion New Taiwan dollars).

Sony's acquisition of Kadokawa is not entirely unexpected. Last year, Sony's chairman Kenichiro Yoshida said, "Popular characters and intellectual property (IP) can have a lifecycle of 30, 50, or even 100 years, and this is an important area for Sony to continue investing in for long-term growth."

Kadokawa Group is like an IP arsenal: it owns heavyweight works such as 'FAIRY TAIL'.

Kadokawa Group started as a publishing house in 1945 and owns many heavyweight IPs, including the well-known role-playing game "Elden Ring" developed by its subsidiary FromSoftware, which has sold 25 million copies, and the earlier anime "The Dungeon of Black Company" released by Netflix.

In addition to games, Kadokawa also spans industries such as animation, comics, novels, movies, and media. Famitsu and Dengeki Online, well-known game websites, are media outlets under Kadokawa. In the anime field, Kadokawa Bookstore, Fujimi Shobo, ASCII Media Works (including Dengeki Bunko), and Media Factory (including MF Bunko) hold numerous IPs and channels.

At present, Sony owns 2% of Kadokawa's shares and holds shares in FromSoftware. FromSoftware, which owns the highest-valued game company under Kadokawa, has works such as 'Elden Ring' and 'Dark Souls'. In addition, Kadokawa also owns the 'Way of the Samurai' and 'Tenchu' series IPs, as well as ACQUIRE, the developer of 'The Lost Road Traveller'.

Therefore, this acquisition case is widely interpreted as Sony's move towards Kadokawa's "IP arsenal". Currently, Sony has no comment on the acquisition message, while Kadokawa has stated "unable to comment on this."

Image source: Digital Times

The acquisition of Kadokawa will break the sales deadlock, despite the PS platform's 'game shortage'

Sony has recently launched the latest model of PlayStation, PS5 Pro, but its game performance is disappointing. For example, "Star Sing Special Forces" was officially launched on August 23 this year, but the game stopped operating on September 6, just two weeks after its release, setting the record for the shortest operating time in the history of games.

The development of the game cost about 150 million US dollars (about 4.8 billion New Taiwan dollars), but after its launch, the 'DEI controversy' led to poor evaluations, and the number of simultaneous online players on the Steam platform fell to less than 100 at one point, with sales reaching only about 25,000 copies. Sony may face losses of up to 400 million US dollars (nearly 13 billion New Taiwan dollars) in this project.

As for Kadokawa, it has been in constant turmoil in recent years. First, it was hacked, and its video platform Niconico Anime was forced to close for nearly two months. Then, the Tokyo Olympics bribery scandal broke out, leading to the arrest of Kadokawa Chairman Hiroaki Kadokawa and the forced resignation of him and Vice Chairman Shinji Matsubara.

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This article is reproduced with permission from: Digital Age

Original title: 'SONY plans to acquire Kadokawa Group! Rumor has it that they are targeting IPs such as 'Elden Ring', will a new generation of entertainment giants emerge in Japan?'

『SONY INTENDS TO ACQUIRE KADOKAWA! Pass on the lock law ring, maze rice and other IPs, the new entertainment behemoth is coming?" This article was first published in 'Encryption City'