Thoughts on the Possible Sony/Kadokawa Merger/Acquisition
(Will this acquisition go through?)
A recent rumor has come out within the past week that Sony & Kadokawa are negotiating a deal for a possible acquisition. If true, this acquisition will become one of the best buyouts for Sony in recent years. Let’s dig in on why that seems to be the outcome:
Sony has been a well-known and influential player in the gaming industry for decades. Ever since the original PlayStation made its debut in 1994 in Japan, the console brand has been thriving and evolving to this very day. With Kadokawa expressing a desire for Sony to purchase the company as a whole, this acquisition would not only allow Sony to gain much more than just gaming rights but also to incorporate their entire anime catalog into their diverse portfolio. The biggest gaming entity that Kadokawa owns, which is well-known and highly regarded in the industry, is From Software. From Software has built a solid reputation for creating remarkable and innovative titles such as the Armored Core series, but they are primarily celebrated for developing the groundbreaking Souls genre that appeals to hardcore gamers seeking an extreme challenge. Ever since the first Souls game, Demon’s Souls, was released back in 2009 for the PS3, many players were captivated by this title as it introduced a unique gaming experience characterized by its difficult, yet ultimately satisfying gameplay that tested the skills and dedication of countless players.
(President of From Software, Hidetaka Miyazaki)
Creator & President of From Software, Hidetaka Miyazaki, has brought a new perspective to the gaming industry, creating such a world that is inspired by a dark Renaissance illustration to captivate the essence of how players can react quickly to the events happening around them while also strategizing their next moves before entering a boss fight. In 2011, another Souls game was launched, creating a frenzy for the hardcore audience to grab their hands on and challenge the mastery of the game. Dark Souls was just as challenging as Demon’s Souls and offered more scale within the game depending on the environments & bosses gamers come across. By having Bandai Namco publishing the Dark Souls series compared to Sony only publishing Demon’s Souls, it reached newer gamers and platforms than just solely being on PlayStation. The series reached a plateau of impeccable challenges across the game’s series and had players highly satisfied with what was offered. Miyazaki continued to expand the Souls genre with Bloodborne, a PlayStation exclusive released in 2015 for PS4. Many fans appreciated its gothic setting and are now requesting a remake with PS5 graphics. Additionally, Elden Ring, released in 2022 and inspired by George R.R. Martin's novel, is a major reason for Sony's interest in acquiring the studio.
Kadokawa owns Spike Chunsoft, creators of Danganronpa, and Acquire, the studio behind Octopath Traveler, along with several other companies. But, there's more to explore.
Sony Acquires both Funimation/Crunchyroll.
Will they be able to acquire the anime sector from Kadokawa as well?
Sony pretty much dominates the anime forefront with its powerhouse subsidiaries Aniplex, Funimation, and Crunchyroll. Ever since these strategic acquisitions, all of the major anime platforms have seamlessly merged into one comprehensive streaming powerhouse, entirely hosted on Crunchyroll. By potentially acquiring Kadokawa, Sony aims to expand its already extensive anime library even further. This expansion could bode well not only for enriching their catalog but also for attracting a larger number of subscribers who are eager to discover and enjoy their favorite anime and manga series—all on a single, unified streaming platform without the inconvenience of juggling multiple services. While many fans are enthusiastic about this prospect, others caution that it may signal the emergence of a monopoly, effectively sidelining numerous beloved anime shows from competitive streaming platforms. Nevertheless, it undeniably gives Sony a significant advantage to build on their library as a whole and dramatically increase their appeal to a broader audience overall.
Many companies have emerged with their eyes set on acquiring the renowned Kadokawa, including major players like Tencent, which currently holds a notable 16.25% stake in the conglomerate, while the entertainment giant Sony possesses a substantial 14.09%. Additionally, tech behemoth Microsoft and the South Korean company, Kakao, have also expressed interest in potentially acquiring Kadokawa. As reported by Reuters, it has come to light that Kadokawa reached out to Sony, discussing the possibility of Sony outright buying the entire company, a move that has ignited passionate discussions and debates among gamers and anime fans alike. The idea of such a significant acquisition could indeed transform into reality if negotiations between Sony and Kadokawa lead to a successful agreement. We are all eagerly awaiting updates on this situation, with expectations that the outcome will become clearer in the coming weeks. However, for the most accurate information, we may have to wait until Sony publishes its next fiscal year update, which is anticipated around April or May 2025.