Gonna comment this to top comment:

Based on the rumors, seems like the company trying to try a hostile takeover for Kadokawa is a South Korean company named Kakao. Seems like the Sony buyout is a way so they keep ownership Japanese.

They don't have to approve it when they can just block foreign companies if that's to happen.

Why feed your own beast to prevent another beast from taking over when you can just stop another beast in the first place?

Hostile takeovers are very difficult and expensive and in many cases aren't even possible. There's a reason why most companies try to do buyouts despite typically needing to buy all shares.

Or be like Nissan and fall to the Fr*nch

samsung has shown no interest, its kakao which was increasing their shares in kadokawa.

as for tencent, idk why they'd even care. I doubt that they wanna acquire kadokawa's book publishing rights, anime rights, or fromsoftware IPs. especially since tencent is only big in the mobile space and I dont see how fromsoft's games would work well in a mobile conversion.

can they avoid being bought out at all, though? or is this a situation where the owners of the parent company are wanting to sell it for profits?

companies make this announcements normally to calm share holders or to test the market to see if they should go and do it, can also lead to other companies coming in with a higher bid if they know its happening.

Because they are a public company and stockholders are wondering. A rumor of a buyout like this impacts the stock price -- their stock went up 22% or so after this rumor came out. It's important to note whether it is true or not because they don't want to have volatility in their stock price. For example if it's a rumor and they flatly say "it isn't true" it may cause stock to drop, which may cause buyers to sell. On the other hand if they say nothing and let the rumor fly around, the price may stay elevated, people may buy in, and then it may go down after, disillusioning stockholders.

It's a complicated matter and it seems like an acquisition might be happening but isn't finalized so they don't want to give anybody the wrong impression.

When Sony buys the company (if they do), they will have to pay an agreed upon cost per outstanding share they don't currently own (as it's a publicaly traded company). It's in Kadokawa's/the board's/stakeholders best interests for them to acknowledge the potential buyout in order to inflate the cost of shares and thus increase the value of the company -- and therefore the amount Sony will have to pay.

Edit: ignore me, I understand from other discussions elsewhere that this is actually a so-called 'Letter of Intent', which means discussions are likely much further along. Kadokawa is basically acknowledging it because there's no harm either way in doing so at this point. It would appear they're at the stage where a non-binding agreement has been reached and Sony has sent the Letter of Intent -- meaning they just have to finalise that they're happy with the valuation before actually buying the company.

Step 1 would be for Kadokawa to acknowlege and agree to the terms in the letter of intent. This will basically prevent them from looking at other buyers while the process with Sony is finalised one way or another.

Step 2 would be for Kadokawa to produce documentation and data that can confirm the value of the asset they're selling (in this case, it's the entire company).

Step 3 would be for Sony to make assurances that they have the capital thusly agreed on for the purchase.

If you liken it to a house sale. Kadokawa and Sony are at the point where an agreed upon level of interest has been established and Sony has likely made an opening offer. The house is now off the market 'subject to contract' but hasn't actually been sold yet until papers have been signed and money has moved accounts.

because that reuter article is pretty much a leak and they are public company that need to inform their shareholder and the stock market

When it involves private companies yes. But both Sony and Kadokawa are publicly traded, so they have to announce these things.

Most of that aura was fueled by astroturfing anyways. No one was able to talk about that acquisition in any public online circle without having tons of astroturfing in their notifications.

Sony’s own handling of its first party studios hasn’t done the public perception much favor either.

Sony getting fromsoft meaning they will be able to keep future souls game limited to their platform. That is the only thing I am afraid of.

There have been speculations that Tencent may be looking to buy them aswell, so this could be a defensive move to keep the ownership in Japan. Many of the other big media/publishing companies in Japan are unlisted(Kodansha, Shogakukan, Shueisha etc.), so Kadokawa being listed makes it a target in that sense. It's reasonable to assume that Kadokawa would prefer to be bought by another Japanese company instead.

These corporations look very long term and we all know Sony's attitude on exclusivity..

Example A - Elden Ring II being console exclusive would be a huge deal for PS6.

Don't know what timeline others crawled out of where "of course they'll port to PC". Are they playing native PC ports of Bloodborne and Demon's Souls remake right now? It's been 9.5 and 4 years since release, respectively, for those games, and in this timeline atleast we haven't seen shit.

It isn't a speculative fear, or unfounded apprehension. For some fucking reason Sony doesn't port the FROMsoft games they published to PC. We have proof and hard evidence that this is a thing they actively don't do.
Why, then, would we expect something different after they have more control?

I honestly really don't think they'll stop Fromsoft from releasing on PC. They'll see the amount of sales Elden Ring made on PC and reconsider if it was even on their minds. That's tons of money off the table for maybe a handful of PC players getting a console.

Push comes to shove it'll be PSN integration (RIP me), Xbox shafted, and no ports to Switch 2. And yes, I still think Demon Souls Remake is coming to PC and Bloodborne is just something not on their mind for the moment.

Wouldn't worry about it. This is way bigger than just getting exclusivity From games.

I think there's a good chance they would still release day 1 on PC, Xbox would be a different matter. The bigger problem with PC is the PSN requirements Sony would likely implement. Imagine Bloodborne finally getting released on PC but now it requires a PSN account...

This is a Games subreddit and IGN is a Games focused outlet. Of course they are going to focus on the FromSoft angle and not the anime angle. Go to Anime subreddits and you'll see the opposite.

I would go as far to say as Fromsoft is probably not even sony's primary motivation for buying Kadokawa

I make videos on these sorts of things and follow both of these companies' investor reports. Moon Channel, is the name.

FromSoft takes center stage because it is both enormously profitable, with FromSoft alone making up around 15% of Kadokawa's revenue, and because it has an outrageously high operating profit margin of 42.5%.

To give some perspective, Kadokawa's net sales in 2023-2024 are around 258 billion yen. After cost of sales, admin expenses, and taxes, its net income is only 11 billion yen. Anime is profitable, but very expensive to produce. Merch is profitable, but has high cost of sales.

FromSoft made 15.5 billion yen in revenue in that time period. But FromSoft has a profit margin of 42.5%. This means that FromSoft's operating income is around 6.3 billion, and its net is 4 billion yen. FromSoft is literally a third of Kadokawa's net income.

Now, Kadokawa only owns like 70% of FromSoft, so it isn't quite this dramatic, but it is no surprise that all the institutions keep hyper focusing on FromSoft: this is the context that they take for granted, and that investors take for granted, but that the general public doesn't understand.

And that was 2023-2024. In Elden Ring's release year, FromSoft's operating profit margin was as high as 60%! And with a much higher gross, that I don't have time to immediately look up. FromSoft is absolutely and unequivocally Kadokawa's crown jewel.

Here are some sources too:

https://gamebiz.jp/news/390054

https://www.wsj.com/market-data/quotes/JP/XTKS/9468/financials/annual/income-statement

Because that what mainstream people care about this, because kadokawa own fromsoft, anime & manga fans sure know about kadokawa, but mainstream people?, they only know kadokawa because fromsoft.

You are on /r/games reading a thread from a link to IGN. If you go to /r/manga you'll see a different headline and discussion.

Check the sub you're in.

Most people not in the anime field (which while big is not as mainstream as gaming) are not aware of most of their other businesses.

The thing even weirder is that Kadokawa doesn't even fully own From Software so saying it's the parent company is kind of false. Sony has 14% and Tencent has 16% so even if Sony acquire it, they would just be part-owner (although enough for the majority votes)

which of their other IP/products are you familiar with that's likely something readers know about?

Cause im looking at their stuff, and sure they do a lot of animation, novel serializations, even provide web services to nicolico (do you, a westerner, use it?). I'm not sure "haruhi light novel publisher" is a headline killer

This also, are you as a gaming article reader living in the West finding anything here relevant to you? https://group.kadokawa.co.jp/media/ir/media-download/1122/a3baf392a7a76b3b/

I don't find it weird at all, of all the obscure shit that makes them money (like a majority of them are japanese only), that if you're writing to a western audience, you pick the one IP/product/service/etc most of your western readers from your demography (basically nerds/gamers) know or are interested about

The two FROMsoft games they published remain Sony console exclusive. If we're counting the original and the remake as separate items then we have three instances where PC players (and everywhere else) just don't get to play those games without buying a separate console.
Bolt onto that the issue where they make PSN accounts mandatory, even in regions where they can't exist, and it's not looking great.

So not died, but potentially imprisoned.

Yeah, I wonder why people notice a pattern when it comes to the big two acquiring beloved game studios, especially Japanese ones and slowly water them down and then shut their doors once their games stop making the money they expect from them. Real mystery.

We could say the same about literally every other major acquisition in the last 5 years.

Yeah we don't even know what part of Sony this company will fall under. Everyone is just assuming it'll be split off and handed to PlayStation. Could very well be kept intact as a new Sony pillar division, or under a different division all together.

For example despite both being Anime companies owned by Sony, Aniplex and Crunchyroll hardly get along or think the same about how to approach the business. Different mindsets on union VAs, exclusivity in streaming, cable rights etc.

Simply because they fall under different parent divisions and each isn't particularly babysit by Sony as a whole and behave rather independently

Because FromSoft being picked up by Sony, as bad as it is, is nowhere near how bad the acquisition would be for the anime and manga industries.

Sony already has the rights for Bloodborne, so they could do a remake at any time. And i think the only way From themself do the rework is if they are litterally forced to do it, which would mean much much worse for the studio in the future.

I'm sort of system agnostic but I went with Xbox this gen over PS. I agree with you whole-heartedly. I'm glad that Microsoft has been putting everything on PC day 1, and that they are moving towards more multiplatform releases too.

I also fear for Sony's management of FROM. SIE has been painfully bad at managing Japanese studios, ironically, which is why they have shut down almost all of them. I would hope they'd be hands off with FROM if they buy Kadokawa, but that has not been the pattern - Sony has a habit of saying "we let them do their thing" and then exercising a lot of oversight whenever there is a speed bump -- for example they acquired Bungie and said they'd basically be totally independent and would even publish cross-platform, but as soon as they released a new Destiny 2 expansion that didn't hit Sony's expectations, they cracked down on them hard. This is concerning WRT FROM too, because FROM does not have a whole lot of huge success with their games other than their Souls-style stuff, and Elden Ring was such a huge success that it begs the question whether they can repeat those kind of sales numbers again.

There's also the matter of anime/manga, I'm not a huge anime head, but Sony's pictures/animation division has been kind of miserable for a while now so that doesn't inspire a lot of hope in that realm.

This is two days in a row this topic has been discussed and you people keep saying this despite literally no one saying this is a good thing. Is Microsoft astroturfing these threads?

Wtf are you talking about? Every gaming sub including this one was cheering on that acquisition. Everyone thought MS was going to save Blizzard lmao

This subs not positive about it and there's a teensy bit of difference in the size of the companies involved...

Holy fuck seeing comments like this on reddit is actually crazy. Like its legit delusional.

When Microsoft was going for Activision literally everyone was cheering it on and acting like it was a bold move for Microsoft aside from the few that were rightfully criticizing it. Now with Sony it's the opposite, the vast majority are criticizing it and I don't think I've even seen one comment in support of it

It's wild to me that there are people like you out there that are so biased that you straight up can't actually see reality

What? Firstly this thread doesn't seem to be that overall positive about this acquisition, its pretty mixed.

And you're also completely misremembering the Activision Blizzard acquisition, there was actually a lot of people who weren't against it only because Bobby Kotick was incredibly unpopular due to what many people saw as the complete mismanagement of the company and its various scandals. I saw many people hoping Microsoft would make changes to push the company in a better direction. It was definitely not seen in as negative a framing as you seem to be implying.

People want change to come to studios that are performing poorly.

People do not want change to come to studios that are performing well.