Kadokawa has confirmed that Sony has offered to buy them, but there’s a catch.
As reported by Gematsu, the conglomerate has offered a statement with an official English translation. Their statement said this:
“There are some articles on the acquisition of Kadokawa Corporation (hereinafter “the Company”) by Sony Group Inc. However, this information is not announced by the Company.
The Company has received an initial letter of intent to acquire the Company’s shares, but no decision has been made at this time. If there are any facts that should be announced in the future, we will make an announcement in a timely and appropriate manner.”
As we had reported yesterday, the immediate concern surrounding Sony’s potential acquisition of Kadokawa was FromSoftware, the developers behind one of the greatest games released in this console generation in Elden Ring. While it’s likely that Sony would stop bringing future FromSoftware games to Xbox, they may make undesirable compromises for other platforms.
For example, Sony has seemingly decided to make it normal to require PSN logins for their PlayStation Studios games on PC moving forward. That will effectively region lock FromSoftware PC games in most parts of the world.
We should also acknowledge that this is actually about more than FromSoftware. Other game companies that Kadokawa owns, such as Spike Chunsoft and Acquire, also make games for other companies, like Bandai Namco and Nintendo. So Namco and Nintendo may also never be able to work together on a Dark Souls port to a Nintendo platform, but Namco will have to find other studios to make Dragon Ball games, and Nintendo may have to find a new Mario & Luigi developer.
But the monopoly issues are bigger than the video game industry. As explained in this article from the website Comic Book, both Sony and Kadokawa have huge anime businesses, including both production and distribution in Japan and around the world. While this is not well known in the West, Kadokawa’s broader businesses in Japan include publishing, which means they find many of the popular manga and light novels that make their way to becoming anime.
So, the big issue here is if Sony manages to snag this deal, they will have secured the entire manga to anime publishing pipeline. That will be big business for them, but it will cause real harm to both the manga and anime businesses and to the creators, including writers, artists, and animators, all across the board.
Punctuating this is that Sony already holds a monopoly in the anime distribution business in the US. As the owner of Crunchyroll, and more recently, Funimation, they have clamped down the rights for practically all anime that even makes it to the US and Europe. Their few competitors, streaming service HiDive and distributor GKIDS, may have their own popular anime, but they are simply not at the same scale.
It’s possible that Sony could make this work by spinning off certain parts of this business, or making commitments to work with competitors, the same way Microsoft did in regard to the Activision deal. But for now, what we know is that Sony made an offer and Kadokawa has yet to accept it.
