Rumor: Kadokawa Wanted Sony To Buy Them For Years – But Sony Only Wanted Their Anime And Video Games

Bloomberg has a new report on the Sony – Kadokawa deal, with some new details that haven’t been made public before now.

To quote Takashi Mochizuki’s report:

“They’ve been testing the waters for a potential combination for years, but never quite resolved differences over the degree of commitment. Tokyo-based Kadokawa wants its city neighbor to buy it entirely or not at all, while Sony has long sought to surgically extract assets related to anime and video games.

The fact the two are now at a formal stage of negotiation is very encouraging. Both sides might actually be ready to get serious and thrash out a deal.”

For those who don’t know, Kadokawa’s businesses outside anime and video games include e-book platform Bookwalker, film companies like Kadokawa Daiei, the home of Gamera, travel company Anime Tourism Association, and a wide variety of businesses with some or no connection to Japanese popular culture.

Mochizuki’s report also brings up other big investors in Kadokawa, including Korean conglomerate Kakao, as we had reported on, and Chinese conglomerate Tencent. We thought it was curious that the report did not make mention of the increase in hostile takeovers of Japanese companies, which we dropped a link to.

In our report, we mentioned Canadian company Alimentation Couche-Tard attempting such a hostile takeover of Seven & I Holdings. While that deal hasn’t pushed through yet, it would be a coup for Couche-Tard to buy out their competitor. As of this writing, analysts don’t think this deal will go through, because Couche-Tard don’t have the money and are unlikely to be able to raise it.

But the hype for hostile takeovers and consolidations jumpstarted in February of this year, when electronic motors company Nidec successfully acquired their rival Takisawa, and for life insurance company Dai-Ichi Life to acquire welfare company Benefit One.

If you need help visualizing this scenario in Japan, imagine the era in the 1980s when Japanese companies went buying American properties and companies in the US. In this atmosphere, Sony bought Columbia Pictures, Nintendo bought out the Seattle Mariners baseball team, and Mitsubishi bought New York’s iconic Rockefeller Plaza. That atmosphere is what exists for Japanese companies now, in the twisted roundabout way that other conglomerates outside Japan are now looking to buy them out.

As Mochizuki points out, Kadokawa is unique compared to its peers in Japanese media companies. Shueisha, the biggest manga/anime company of them all, who holds properties like Dragon Ball Z, One Piece, and Naruto, and Kodansha, who holds properties like Astro Boy, Akira, and Ghost in the Shell, are both private companies. Unlike Kadokawa, their owners aren’t interested in buyouts, and they are successful at a level where they are not likely to ever have to do so.

While most gamers still think the most important aspect of this acquisition is FromSoftware, we may need to remind our readers that Sony already owns 14 % of the studio. In fact, we’ll be bold enough to argue that FromSoftware may not fully desire to be part of this deal. To this day, Bloodborne not being ported outside of the PlayStation 4 remains a sore sticking point for the studio. As recently as last June, Hidetaka Miyazaki has expressed his discontent at that situation.

As things stand, Sony and Kadokawa seem to actually be working together to hash out a deal, but we shouldn’t get in advance of such a deal happening. And we would tell fans to hold off on making any presumptions on what that will mean for Sony and FromSoftware fans. In case you didn’t realize it, this could get ugly.