Sony Reconsiders Kadokawa Deal Due to High Costs
Nov. 30, 2024Sony Reconsiders Kadokawa Deal Due to High Costs
Negotiations betweenSony and Kadokawahave reached a stalemate due to the high cost the acquisition would entail for the PlayStation parent company.
The video game industry has been closely watching this potential acquisition ever since Sony’s interest in Kadokawa, the parent company of FromSoftware, came to light.
Following initial rumors, Kadokawa confirmed the discussions, highlighting the potential benefits for Sony, including access to a wealth of assets spanning anime, music, and video games.
However, it seems unlikely we’ll see Sony owning the studio behindElden Ringanytime soon. Talks have stalled over Kadokawa’s valuation, which Sony considers too high.
According to Japanese outletToyo Keizai, Sony harbors serious doubts about whether acquiring Kadokawa is a profitable move.
Kadokawa expects Sony to pay the full valuation of the company, exceeding $640 million (€4 billion). Sony, on the other hand, is only interested in assets relevant to its business, particularly the video games and anime sectors.
Kadokawa insists on including other assets, such as adult magazines and TV-specialized press, areas that Sony finds unappealing.
This tug-of-war is not new. Sony and Kadokawa have reportedly been negotiating for years, but talks always collapse due to Kadokawa’s insistence on a complete buyout.
If the deal goes through, Sony would acquire Kadokawa’s 70% stake in FromSoftware, as well as other studios like Spike Chunsoft and Acquire.
Additionally, Sony would gain access to a vast library of anime content, opening up possibilities for new licenses and adaptations.
While Kadokawa’s asking price may seem steep, it pales in comparison to the nearly $70 billion Microsoft paid for Activision Blizzard. Notably, Sony spent $3.6 billion to acquire Bungie in a separate deal.
However, Sony has already made significant recent investments, such as spending $1.2 billion for music rights to bands like Queen and Pink Floyd.
If a bidding war arises, Sony might step back, leaving the door open for competitors like Microsoft, Tencent, or South Korea’s Kakao Corp.
The creators ofDark Soulsare key players in this story. In fact, FromSoftware is believed to have played a role in encouraging Sony to pursue the acquisition.
Under Hidetaka Miyazaki’s leadership, the studio has a strong relationship with Sony. Many shareholders argue that securing exclusivity with Miyazaki alone would justify Sony meeting Kadokawa’s price.
In any case, a decision on the acquisition is expected by the end of the year, one way or another.
Be sure to check out other newsSony Is In talks To Acquire The Parent Company of FromSoftwareand alsoShuhei Yoshida Announces Sony Retirement
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