Sony is reportedly in advanced discussions to acquire Kadokawa Corporation, the Japanese media powerhouse behind the blockbuster game Elden Ring. This potential acquisition could mark a significant step in Sony’s ambition to strengthen its position as a global entertainment leader.
Sources close to the matter reveal that the talks are ongoing, with a deal possibly materializing in the coming weeks. Following the news, Kadokawa’s shares surged 23% to their daily limit, reflecting the market’s excitement about the potential merger.
Expanding a Winning Partnership
Sony already holds a 2% stake in Kadokawa and owns a stake in FromSoftware, the Kadokawa subsidiary responsible for Elden Ring. The critically acclaimed game—developed by visionary director Hidetaka Miyazaki and featuring lore contributions from Game of Thrones author George R.R. Martin—has sold an impressive 25 million units. Its recent expansion, Shadow of the Erdtree, sold 5 million units within three days of its June release. 
For Sony, this move isn’t just about gaming. Kadokawa’s expertise in expanding intellectual property (IP) across multiple platforms—including games, anime, and merchandise—aligns perfectly with Sony’s long-term strategy of investing in enduring franchises.
Kadokawa’s Legacy in Media
Founded as a publishing company in 1945, Kadokawa has evolved into a multimedia giant. Its success spans franchises like Re:Zero, which has grown into a universe of games, anime, events, and collectible figures. Another standout is Delicious in Dungeon, a quirky manga series turned anime that follows adventurers who cook and eat monsters they encounter in dungeons.
Despite its successes, Kadokawa has faced recent challenges. A cyberattack in June disrupted operations, and its former chairman, Tsuguhiko Kadokawa, resigned two years ago after being indicted for bribery related to the Tokyo Olympics.
Sony’s Strategy: The IP Goldmine
For Sony, known globally as the inventor of the Walkman, the pivot from electronics to entertainment has been transformative. Today, the company is a $114 billion juggernaut encompassing movies, music, gaming, and even semiconductor chips.
Sony CEO Kenichiro Yoshida has emphasized the enduring value of compelling IP, saying, “Loveable characters and intellectual property can live for 30, 50, or 100 years. That’s something we want to invest in for sustainable growth.”
This philosophy has already borne fruit. Sony’s anime division has thrived, riding a global wave of streaming-driven popularity, while its gaming franchise The Last of Us became a hit HBO series, broadening its audience beyond gamers.
Challenges and Opportunities
While Sony has experienced notable wins, it has also faced setbacks. Earlier this year, the company abandoned a $10 billion merger between its Indian arm and Zee Entertainment Enterprises due to unmet conditions.
Acquiring Kadokawa, however, represents a clear opportunity to deepen Sony’s foothold in anime and gaming—sectors experiencing rapid global growth. With Kadokawa’s extensive catalog of beloved franchises, Sony could leverage its entertainment ecosystem to create synergies across platforms.
If the deal proceeds, it will not only bolster Sony’s already impressive portfolio but also signal the company’s continued commitment to shaping the future of entertainment.
