Sony May Find It Hard to Buy All of FromSoftware Parent Company Kadokawa, Financial Report Claims

ign.com:

As Sony’s pursuit of Kadokawa rumbles on, financial experts have said the PlayStation maker may find it hard to buy the entirety of FromSoftware’s parent company.

Japan’s Toyo Keizai (via Automaton) reported that Sony may be put off the deal due to the cost of having to acquire all of Kadokawa, rather than the parts it’s actually interested in.

Kadokawa is reportedly only interested in doing a deal with Sony if it buys the entire company. Sony, however, is reportedly only interested in “extracting” assets related to anime and video games, which presumably includes the developer of Elden Ring.

Buying all of Kadokawa would cost 640 billion yen (approx $4.3 billion), according to expert estimates. Sony’s cash for buyouts is apparently tight at the moment due to investments made elsewhere. As a point of comparison, Sony bought Destiny developer Bungie for $3.7 billion back in 2022. The studio has since suffered multiple rounds of layoffs and project cancelations.

There’s also the apparent prospect of a bidding war that would cause Kadokawa’s sale price to soar beyond Sony’s limit. The alternative is for Sony to buy 50% of Kadokawa and turn it into a subsidiary it doesn’t wholly own.

Kadokawa’s business extends into areas that fit into Sony’s broader entertainment offering, which includes anime, manga, TV, and film. Kadokawa is a prolific publisher of anime, and Sony already owns anime streamers Crunchyroll and Funimation. As well as FromSoftware, Kadokawa owns Danganronpa developer Spike Chunsoft, Octopath Traveler developer Acquire, and RPG Maker and Pixel Game Maker developer Gotcha Gotcha Games. Kadokawa is the majority owner of FromSoftware, with around 70% of the company. Sony already owns around 14% of the developer, with Tencent owning around 16%.

Piers Harding-Rolls, Research Director at Ampere Analysis, told IGN that news of a potential deal isn’t that surprising. "Sony’s interest in Kadokawa’s games publisher FromSoftware was made more concrete in 2022 when it