{"id":67024,"date":"2026-05-22T16:22:41","date_gmt":"2026-05-22T07:22:41","guid":{"rendered":"https:\/\/automaton-media.com\/en\/?p=67024"},"modified":"2026-05-22T18:44:48","modified_gmt":"2026-05-22T09:44:48","slug":"fromsoftware-parent-company-kadokawa-criticized-for-relying-on-third-party-publishing-and-allowing-profit-leakage-by-activist-shareholder","status":"publish","type":"post","link":"https:\/\/automaton-media.com\/en\/news\/fromsoftware-parent-company-kadokawa-criticized-for-relying-on-third-party-publishing-and-allowing-profit-leakage-by-activist-shareholder\/","title":{"rendered":"FromSoftware\u00a0parent company Kadokawa criticized for relying\u00a0on third-party publishing\u00a0and\u00a0allowing\u00a0\u201cprofit leakage\u201d\u00a0by\u00a0activist shareholder\u00a0"},"content":{"rendered":"\n

Hong Kong-based hedge fund Oasis Management Company (Oasis hereafter), which became the largest shareholder<\/a> of Japanese publisher Kadokawa<\/strong> in March 2026, recently initiated a push for changes in the company\u2019s management, or more specifically, for Kadokawa\u2019s current CEO to be fired from his position. In an over 130-pages-long document<\/a> titled \u201cA Better Kadokawa,\u201d the investor detailed everything it thinks Kadokawa is doing wrong, with one section dedicated to FromSoftware and its reliance on third parties for publishing. <\/p>\n\n\n\n

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\u2019t come as a big surprise that the fund is unhappy with what it regards as \u201cprofit leakage\u201d from FromSoftware\u2019s overseas sales. <\/p>\n\n\n\n

\"Elden<\/figure>\n\n\n\n

Although third-party publishing deals come with the benefit of shared risk shouldering and co-financing of development and marketing costs, Oasis thinks FromSoftware\u2019s overseas publishers \u201ccapture most of the value before paying royalties or revenue share to developers,\u201d resulting in Kadokawa group\u2019s profits trickling over to third parties. They argue that with 90% of Elden Ring\u2019s 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. <\/p>\n\n\n\n

Oasis also alleged it has been pushing Kadokawa to have FromSoftware self-publish \u201cfor years\u201d (note that while the fund\u2019s stake in Kadokawa first became publicly known<\/a> 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: <\/p>\n\n\n\n

\u201cCurrently FromSoftware\u2019s 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\u2019s catalogue of successes. It\u2019s time FromSoftware takes on the development risks and reaps the rewards.\u201d<\/em> <\/p>\n\n\n\n

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. <\/p>\n\n\n\n

Now, Oasis argues that through investments by Sony,\u00a0CyberAgent\u00a0and Tencent\u00a0made\u00a0between 2021 and 2025, Kadokawa and FromSoftware have raised capital,\u00a0and Kadokawa has expanded its gaming business enough to be able to tackle in-house publishing.\u00a0However, the fund thinks Kadokawa\u2019s current president and CEO Takeshi Natsuno is being \u201ccautious\u201d about shifting to self-publishing\u00a0because external publishers like Bandai Namco have begun offering more favorable contracts\u00a0than before. This has led them to believe that reliance on\u00a0third-parties\u00a0will persist under Kadokawa\u2019s current management.\u00a0It might be worth noting though, that Kadokawa\u2019s side has not made any statements explicitly\u00a0expressing disagreement with an eventual shift to self-publishing, in fact, the company’s shareholder briefings<\/a> even suggest the opposite.\u00a0<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Additionally, prior to the publication of this document, Kadokawa\u2019s board of directors already opposed a separate proposal<\/a> 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\u2019s criticism as unfounded or fundamentally misunderstanding the company\u2019s 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. <\/p>\n\n\n\n

Oasis, however, does not seem to intend to back down. It\u2019s new \u201cA Better Kadokawa\u201d presentation appears to be an attempt to rally other shareholders, openly calling for investors to vote against the CEO. <\/p>\n\n\n\n

Related: Square Enix\u2019s major shareholder drops 100-page presentation criticizing how the company is managed, rallies other shareholders <\/a><\/strong><\/p>\n\n\n\n

\u201cThis is what it means to be good at art.\u201d Capcom veteran Akiman on why Elden Ring\u2019s environments stand out even among higher fidelity AAAs <\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In an initiative to oust Kadokawa’s CEO Takeshi Natsuno, activist hedge fund Oasis has criticized the company’s handling of FromSoftware titles.<\/p>\n","protected":false},"author":55,"featured_media":29797,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_gspb_post_css":"","footnotes":""},"categories":[3],"tags":[17],"class_list":["post-67024","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-japan-related-news"],"blocksy_meta":[],"yoast_head":"\nFromSoftware\u00a0parent company Kadokawa criticized for relying\u00a0on third-party publishing\u00a0and\u00a0allowing\u00a0\u201cprofit leakage\u201d\u00a0by\u00a0activist shareholder\u00a0 - AUTOMATON WEST<\/title>\n<meta name=\"description\" content=\"In an initiative to oust Kadokawa's CEO Takeshi Natsuno, activist hedge fund Oasis has criticized its handling of FromSoftware titles.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/automaton-media.com\/en\/news\/fromsoftware-parent-company-kadokawa-criticized-for-relying-on-third-party-publishing-and-allowing-profit-leakage-by-activist-shareholder\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FromSoftware\u00a0parent company Kadokawa criticized for relying\u00a0on third-party publishing\u00a0and\u00a0allowing\u00a0\u201cprofit leakage\u201d\u00a0by\u00a0activist shareholder\u00a0 - 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