We now have some new rumors about what is going on about Sony’s pending acquisition of Kadokawa.
As we reported yesterday, Kadokawa officially confirmed that Sony made them an offer, but they have yet to make a decision. As shared on the GamingLeaksAndRumours subreddit by user 4000kd, shinobi602 theorizes that this may have something to do with another current Kadokawa shareholder, Kakao.
Kakao, Kadokawa and Sony are all giant conglomerates, with their hands deep in different business. Unlike Kadokawa and Sony, Kakao is from South Korea, and their core business is KakaoTalk, a messaging app that is number one in revenue for both iOS and Android in their home country.
Kakao’s scope of businesses include online banking, transportation, e-commerce, and of course, entertainment. And Kakao Entertainment makes movies and shows, and yes, they produce Kpop. They also own the original WebToon online comic book platform.
Kakao does not have a good reputation in spite of its financial success. We’re talking about a company whose founder was embroiled in a gambling scandal from when it launched. This year, Kakao is embroiled in a stock manipulation scandal over their successful hostile takeover of Kpop and entertainment company SM Entertainment.
So 4000kd’s speculation is very much well grounded. 4000kd shared evidence that Kakao has been slowly buying shares in their Japanese target, Kadokawa, since 2020. Notably, last 2021, Kakao already managed to bulk up to become Kadokawa’s largest shareholder.
4000kd summarizes their point by quoting shinobi602 on his commentary/opinion on the whole situation:
“Typically the two parties agree to a share price for a deal. Sony’s not going to end up paying whatever Kadokawa’s valuation rises to.
What I meant was now if Kakao wanted to do a takeover, they’d have to cough up even more cash. So leaking it intentionally could make sense.”
If you feel like you’ve been reading one too many stories about hostile takeovers in video games, you aren’t imagining things. We’ve been reporting on a different situation with Ubisoft, but one that could lead to the Guillemot family being bought out by TenCent.
But here we will share our own insight in this Sony-Kadokawa situation, and something that you may not have wanted to read. Japan recently passed a new law that enable, and no longer block, hostile takeovers of Japanese companies.
The law lays out guidelines for their satisfaction, but because of these new rules, Japanese companies like 7/Eleven owner Seven & i holdings are now vulnerable to being taken over by foreign owners. Yes, that means beloved Japanese game companies like Nintendo, Sega, and Square Enix, are now all vulnerable to hostile takeovers too, if someone had enough hubris and money to try.
So, it makes sense that Kadokawa would be desperate enough to pitch a monopoly with Sony, to avoid a hostile takeover. Based on what Shinobi said, it’s possible that Kadokawa doesn’t really want to push through with a Sony deal. Their move to disclose may be part of the company’s Succession-like chess moves, to hopefully get out of this with their independence – and investments from both Sony and Kakao – intact.
So if it sounds like GOTY maker FromSoftware is being bounced around like a tennis ball in all this news, that might actually be the case. As terrifying as the prospect of a Sony entertainment monopoly is, gamers and fans should also be wary of a company as shady as Kakao taking over Kadokawa as well.
