A good week and a half ago there was news that Sony was on one Acquisition of Kadokawa Corporation interested in headlines. The Japanese group holds, among other things, the majority shares in the “Elden Ring” development studio FromSoftware and also owns various subsidiaries in different sectors. Most recently it was said that Kadokawa would make a takeover conditional on Sony completely bought out to become.
A circumstance that could potentially pose problems for Sony Group Corporation. At least according to a recent report from the Japanese financial magazine Toyo Keizai. This shows that the complete takeover of Kadokawa could deter Sony. More specifically, Sony would currently be faced with three potential problems in particular.
Complete takeover or integration as a subsidiary?
According to the magazine, one problem is whether a complete takeover could actually take place. Since the talks between Sony Group Corporation and Kadokawa Corporation are still at an early stage, it is unclear whether the PlayStation parent company is seeking a complete takeover or just the purchase of part of the shares. What would be positive here would be that there are no major shareholders at Kadokawa who could stand in the way.
If Sony actually aims to turn Kadokawa into a 100% subsidiary, the company will likely incur significant costs. Based on calculations by Macquarie Capital Securities, the total amount in the event of a takeover would amount to more than 640 billion yen (around 4.0467 billion euros). However, Sony may not have much financial leeway due to other planned expenses.
Toyo Keizai refers to Sony's medium-term management plan for the fiscal year ending in March 2026. For this purpose, the Japanese group has set an investment framework of 1.8 trillion yen (around 11.381 billion euros), including possible returns of shares. In this regard, the financial magazine mentions the increased costs of music copyrights. Sony is said to have invested hundreds of billions of yen just for the rights to works by Pink Floyd and Queen (via Variety). Accordingly, there would be little financial scope for takeovers in other industries, such as games studios.
Closely linked to the rather tight financial framework would be the emergence of other potential competitors, which could become an additional hurdle for Sony. It's not uncommon for other companies to throw their hat into the ring. As a result, price wars often break out to force competitors to retreat. Sony was already this year with multiple acquisitions associated, but is said to have always withdrawn.
Is there a threat of an anime monopoly?
The third and final problem would be faced by Sony Group Corporation following a successful takeover of Kadokawa Corporation. About his Subsidiary Aniplex In the past, Sony has worked with several large publishers, such as Shueisha (“One Piece”), who own the rights to successful manga and light novel series. The anime hit, for example, resulted from such a cooperation “Demon Slayer” out.
However, if Sony were to successfully acquire Kadokawa and make it a subsidiary, such collaborations would likely change drastically. Kadokawa itself sells various popular manga and LN series, which Sony could then fall back on. That's why voices have been raised again and again in the last few days warning of Sony's excessive dominance in the anime market and a possible threat of a monopoly.
“The impact on the industry will be significant. “There is a possibility that relationships between Sony and major publishers will change and alliances within the industry will grow,” said an analyst at Macquarie Capital Securities.
Due to its extensive company network, Kadokawa also has the opportunity to handle pretty much all business transactions relating to a manga adaptation internally. From manga and light novel editors to anime producers to its own merchandise planners, Kadokawa has experts who would be enormously valuable to Sony.
What are your thoughts on the recent report regarding Sony's possible acquisition of Kadokawa Corporation?
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