Prospect of joining Sony feels “too dynamic to be real,” says Kadokawa employee as talks of acquisition shake up entertainment industry
Major Japanese publisher and FromSoftware owner Kadokawa confirmed Sony Group’s buyout intent on November 20, setting both the entertainment industry and stock market abuzz. Although the company made it clear that no decisions have been made on the matter so far, the potential acquisition, valued at an estimated 600 billion yen, could have an enormous impact on the power dynamics in Japan’s anime industry.
While an undeniable incentive for Sony to pursue Kadokawa is FromSoftware, a developer that consistently releases smash hits like Elden Ring into the video game market, another big factor is anime, or, more precisely, original IPs for anime production.
Sony possesses a solid framework for both making and distributing anime, as it owns key companies like Aniplex and Crunchyroll. However, the area the giant lacks in is original IP creation, or making source material to turn into anime. Sony has already expressed its intent to strengthen IP cultivation in the anime field, and according to Toyo Keizai, Kadokawa is the “perfect missing piece” for this strategy.
Kadokawa publishes a large volume of original IPs in mediums such as manga and light novels, which are low-cost when compared to anime or video games. If Sony were to have access to these IPs, they would not have to worry about relying on external publishers or risk investing into original anime titles that don’t have a popular manga already out to help guarantee success.
Not only that, but Kadokawa has a strong framework for in-house anime production. The company produces around 40 animated titles a year and owns studios such as Oshi no Ko’s Doga Kobo.
Hence, if Sony and Kadokawa were to merge, they would become a massive powerhouse in terms of anime, combining Sony’s strong global network and Kadokawa’s content creation expertise. “If we were to integrate with Sony, we could do everything from publishing the source material to worldwide distribution of anime. It feels too dynamic to be real,” Toyo Keizai quotes a Kadokawa employee.
In addition, a top executive of an anime company (not affiliated with Sony or Kadokawa) commented, “An M&A on the scale of 600 billion would be undoable for us. Sony has us beat,” which only goes to show how big of a deal this is for other players in the industry.
