Sony has officially confirmed that they are interested in acquiring Kadokawa.
As reported by IGN, Sony gave this statement to Yahoo Japan in a recent interview (translated via DeepL):
“It is true that we have made an initial statement of intent. We would appreciate it if you would allow us to refrain from further comment.”
It is as matter of fact a statement as Sony can provide. When Kadokawa revealed that Sony had sent them a letter of intent for acquisition last month, they also only confirmed a factual statement. So both Sony and Kadokawa will only officially go on record about a letter that Sony sent to Kadokawa.
The reason this minimal disclosure matters, is Sony and Kadokawa have subsequently not confirmed any prior reporting, rumors, or speculation regarding this possible deal. They won’t confirm that Sony and Kadokawa have been talking about a deal for years, possibly even decades.
They won’t confirm reports that Kadokawa is approaching Sony because they are worried of a potential hostile takeover by other interested parties, such as disreputable Korean conglomerate Kakao, or Chinese industry giant TenCent.
They also won’t confirm rumors about why this deal hasn’t happened yet in some form or shape – while Kadokawa want to be acquired in full, Sony is only interested in their anime and video game businesses.
Automaton recently reported on a new article from Japanese news outlet Bunshun. Bunshun had apparently reached out to Kadokawa’s employees, and they told the paper that they are optimistic for a Sony buyout. This is because the company now has low trust in their current management, particularly President and CEO Takeshi Natsuno.
If you may remember, earlier this year, Kadokawa was hacked. As we reported that as potentially affecting FromSoftware’s online services, the entire company experienced an internal crisis. And if Bunshun’s respondents are to be believed, Natsuno’s slow response has led to a loss of confidence in the company.
So, if you can picture it, Kadokawa as a whole is experiencing the same kind of management and leadership crisis Ubisoft is experiencing at the moment. While we don’t know if Kadokawa’s finances are in a similar situation as Ubisoft is, we should now also consider that it could be a factor to Kadokawa and Sony now seemingly approaching this merger more closely.
Now, Sony’s stock market price may have received a temporary boost, but it’s too early to tell if such a deal will turn out good for both parties, much less the reason you’ve read this far, FromSoftware.
Microsoft has proven that they knew what steps to take to make the most out of their Activision deal when they successfully launched Call of Duty: Black Ops 6 across multiple platforms. Sony can’t say they were able to successfully leverage their purchase of Bungie for Destiny 2.
We know some of you wanted us to make a comparison to Concord here, but it’s actually Bungie that materially hurt Sony more. Even if the wildest rumors that Sony spent $ 400 million, or even more, on the game and its studio are true, that would still be roughly 10 % of the $ 3.6 billion they spent on Bungie.
And we know they officially confirmed that amount on Bungie, and they’ll be chasing ways to make that money back for the next few years. Sony will likely find other investors to help them secure this Kadokawa deal, complicating what could already be a regulatory nightmare.
But if our comparison between Kadokawa and Ubisoft is accurate, then this really might be a make or break situation for the Japanese multimedia company.
Several other game studios under Kadokawa left years ago, such as Grasshopper Manufacture and the people who are now under Dragami Games. Ironically, FromSoftware themselves may be considering those prospects themselves, if this deal, and Kadokawa’s business, goes south in the coming months.
This is a situation where we would definitely want to be completely wrong. But for now, we can only wait and see how this potential deal plays out.
