Hong Kong-based hedge fund Oasis Management Company (Oasis hereafter), which became the largest shareholder of Japanese publisher Kadokawa in March 2026, recently initiated a push for changes in the company’s management, or more specifically, for Kadokawa’s current CEO to be fired from his position. In an over 130-pages-long document titled “A Better Kadokawa,” the investor detailed everything it thinks Kadokawa is doing wrong, with one section dedicated to FromSoftware and its reliance on third parties for publishing.
While FromSoftware self-publishes its games in Japan, overseas publishing is handled externally, predominantly by Bandai Namco Entertainment. Since the objective of activist investors like Oasis is to secure the highest possible return on their investment, it doesn’t come as a big surprise that the fund is unhappy with what it regards as “profit leakage” from FromSoftware’s overseas sales.
Although third-party publishing deals come with the benefit of shared risk shouldering and co-financing of development and marketing costs, Oasis thinks FromSoftware’s overseas publishers “capture most of the value before paying royalties or revenue share to developers,” resulting in Kadokawa group’s profits trickling over to third parties. They argue that with 90% of Elden Ring’s sales coming from overseas via Bandai Namco Entertainment, the publisher was able to record a much higher profit growth than Kadokawa, who owns the majority of FromSoftware.
Oasis also alleged it has been pushing Kadokawa to have FromSoftware self-publish “for years” (note that while the fund’s stake in Kadokawa first became publicly known in March this year, holding does not have to be reported until it exceeds 5%). An excerpt from one of their past letters to the company goes:
“Currently FromSoftware’s business model is to work with publishers such as Bandai Namco and Activision, who take the game development risk but are rewarded with an outsized proportion of the revenues. We appreciate that there was substantial game development risk in the past, but the risk is significantly lower now after FromSoftware’s catalogue of successes. It’s time FromSoftware takes on the development risks and reaps the rewards.”
At the time, Oasis suggested Kadokawa and FromSoftware raise capital for self-publishing, either through a partial IPO of FromSoftware, or by having an external buyer acquire 25% of the studio.
Now, Oasis argues that through investments by Sony, CyberAgent and Tencent made between 2021 and 2025, Kadokawa and FromSoftware have raised capital, and Kadokawa has expanded its gaming business enough to be able to tackle in-house publishing. However, the fund thinks Kadokawa’s current president and CEO Takeshi Natsuno is being “cautious” about shifting to self-publishing because external publishers like Bandai Namco have begun offering more favorable contracts than before. This has led them to believe that reliance on third-parties will persist under Kadokawa’s current management. It might be worth nothing though, that Kadokawa’s side has not made any statements explicitly expressing disagreement with an eventual shift to self-publishing, with some past shareholder briefings even suggesting the opposite.
Additionally, prior to the publication of this document, Kadokawa’s board of directors already opposed a separate proposal from Oasis to vote for the removal of Natsuno from the position of CEO on May 14. At the time, Kadokawa dismissed most of the hedge fund’s criticism as unfounded or fundamentally misunderstanding the company’s actual circumstances. As for game publishing specifically, Kadokawa said its approach is to make comprehensive decisions about whether to go in-house or not for each IP, based on contract terms and other factors.
Oasis, however, does not seem to intend to back down. It’s new “A Better Kadokawa” presentation appears to be an attempt to rally other shareholders, openly calling for investors to vote against the CEO.
