Sony raises stake in FromSoftware's parent company Kadokawa to 10%, but no takeover plans for now

What just happened? The prospect of future FromSoftware games becoming PlayStation exclusives started looking more likely yesterday when Sony increased its stake in the studio's parent company to 10%. Sony paid $300 million for the new shares of Kadokawa, and while it is now the company's largest shareholder, it doesn't own it outright – there were rumors that Sony was planning an acquisition.

It was reported in November that Sony was in talks to acquire Kadokawa Corporation. In addition to FromSoftware, Kadokawa owns Spike Chunsoft, developer of the Danganronpa series, as well as Acquire (Octopath Traveler) and Gotcha Gotcha Games (RPG Maker and Pixel Game Maker).

Instead of a full takeover, Sony and Kadokawa have entered into a "strategic capital and business alliance agreement." This includes Sony increasing its shares in Kadokawa from the previously owned 2% to 10%.

Kadokawa owns 70% of FromSoftware, while Sony already has a 14% stake in the developer of the Souls games, Sekiro, Bloodborne, Armored Core, and more. Chinese gaming giant Tencent owns around 16% of the firm.

Sony and Kadokawa write that their alliance is intended to maximize both companies' IP value globally and facilitate wider and deeper collaboration. That includes the discovery of new creators and turning Kadokawa's IPs into live-action films and TV dramas globally, co-producing anime works, and further expanding the publishing of Kadokawa's games.

Before you get too excited about a Dark Souls/Elden Ring live-action show or anime, Kadokawa has film and animation studios, including those focused on anime. Sony, of course, already owns anime streaming services Crunchyroll and Funimation, which is a big driver behind its interest in Kadokawa.

Reports that Sony was set to acquire Kadokawa caused concern among non-PlayStation-owning Dark Souls/Elden Ring fans that the series would become exclusive to its console. Demon's Souls and Bloodborne remain PlayStation-only, and Sony often waits a long time before releasing its big games on PC.

It's possible that Sony buying more shares of Kadokawa is preparation for a full takeover further down the line. Experts estimate that a buyout would cost around $4.3 billion, more than the $3.7 billion it paid for Bungie back in 2022. Sony might even buy 50% of Kadokawa so it could become a subsidiary that it doesn't fully own.