FromSoftware parent Kadokawa Corporation has confirmed that Sony has in fact expressed formal interest in acquiring the company.
The proposed acquisition was first reported yesterday by Reuters and Nikkei, each citing their own separate sources saying a deal was in the works. In a statement released today acknowledging those reports, Kadokawa said that while no formal announcement about a possible buyout has been made, "the company has received an initial letter of intent to acquire the company's shares."
Kadokawa added that "no decision has been made at this time," but given how these things generally work, the receipt of a letter of intent indicates that the process is fairly far along: The initial chit-chat and wheeling-dealing is over, and everyone is more or less prepared to move forward. A regulatory body could halt the acquisition (although given how that worked out with Microsoft and Activision-Blizzard, I can't say my confidence in the ability of government agencies to keep big companies in line is at an all-time high) but aside from that, it's very likely that this deal will be done.
Snapping up Kadokawa would be a big get for Sony. FromSoft is obviously a crown jewel, but Kadokawa has its fingers in many pies, particularly anime and manga development and publication; it also owns, through its Dwango subsidiary, Danganronpa studio Spike Chunsoft. In its latest earnings report, Kadokawa reported significantly more income from its "publication/IP creation" operations (books, manga, and so on) and animation/film than gaming. Sony has shown a clear interest in owning more of that space in recent years, after acquiring Funimation in 2017 and Crunchyroll in 2021. Earlier this year Sony looked into buying Infocom, one of Japan's largest online comic platforms, though a private equity company came out with the winning bid.
The downsides are obvious—media consolidation is a scourge upon the land and all that—but I think at this point the best we can realistically hope for is that Kadokawa's employees come out the other side in better shape than those left behind by Microsoft and Embracer. I can't say my confidence in that is especially high right now either.
