Anime seems to be big business once again. Business website Reuters reported yesterday Sony, the entertainment and technology conglomeration, is looking into purchasing multimedia Kadokawa, a Japanese entertainment giant. The report isn’t an official announcement but the potential deal was reported by two sources familiar with the matter. The talks are ongoing at the moment but a deal could happen in the next few weeks according to these two sources. 

Sony Logo

Sony continues their investment in anime as a global business. 

Potentially buying Kadokawa isn’t a new turn for the global giant who has had a stake in the anime industry for years. The entertainment company Aniplex, whose logo and jingle will be familiar to anime fans, was created by Sony in 1995 as a way into the anime market in Japan.  Sony also holds some stakes in both anime powerhouses Toei Animation and Madhouse Studios. For at least the last thirty years, Sony has seen anime as a wise investment.

It’s the last decade or so, where this investment was seen in North America. It began in 2017 with the company acquiring Dallas based anime distributor Funimation. That acquisition would lead to Sony purchasing Funimation rival Crunchyroll Inc. in 2022, with both companies eventually merged into just being Crunchyroll. Sony continues to increase visibility for anime with wide releases of anime films and even previewing an upcoming Crunchyroll film slate at this year’s CinemaCon. It’s very clear this is an industry the technology and entertainment giant takes seriously. 

What does the purchase of Kadokawa mean?

FromSoftware

So why purchase Kadokawa – which Sony currently owns a 2% stake in? Ownership of Kadokawa would give Sony a potential new foothold in many North American markets. The Reuters article makes a big deal about Elden Ring, the game released by FromSoftware and owned by Kadokawa. Make no mistake Elden Ring is a big deal with 25 million copies sold. This year’s expansion, Shadow of the Erdtree, sold over 5 million copies in 3 days. Sony buying the company that owns the studio behind one of the decades biggest hits in video games is smart business.

But Kadokawa is a company with hands in a lot of entertainment industries besides gaming; anime, film (they own Daiei home to Gamera, Guardian of the Universe), and publishing. Sony currently doesn’t have any book or magazine publishing under its umbrella of companies outside of music publishing, which is unusual for a company of that  size. Buying a company like Kadokawa would certainly fix that. Doing so would give them inroads into the lucrative North American manga and light novel market. Kadokawa currently holds a majority stake (51%) in manga and light novel powerhouse Yen Press (the other 49% is owned by French publisher Hachette) and owns J-Novel Club, a company that translates light novels. This shows further proof that where Sony sees an opportunity, it goes for it.

The ugly head of consolidation rears its head again

However, the big concern with this potential deal is media consolidation and what it might mean for the anime and manga market in North America. Sony hasn’t totally cornered the anime market and now potentially manga market here, but it would have a bigger stake in both. Additionally while Yen Press publishes many of Kadokawa’s manga titles, it doesn’t publish all of them. 

Yen Press logo

Consolidation of publishing IP under a parent company is something frequently seen in North America. Disney brought most of their licensed IP back “in house” under Marvel. Once Kodansha entered the North American market, books like Ghost in the Shell and Cardcaptor Sakura left their US publishers to be published under the new US branch of Kodansha. Sony might do something similar for Kadokawa books currently with North American homes at other US publishers.

For many in North America, the biggest question relating to this acquisition might be the fate of the website Anime News Network. Known for its reliable anime and manga coverage, ANN was purchased by Kadokawa in 2022. Kadokawa has left the website to its own devices. Sony might not be so generous. The site continues to be a valuable resource for many and losing it would certainly create a vacuum for their reporting.

Regardless of any potential outcome, neither company has confirmed or denied any deal taking place. Right now it remains a possibility. It’s a possibility with the potential to shake up both anime and manga in North America for better and worse.

UPDATED 10:50am EST The Verge reported that Kadokawa announced Sony’s interest in a purchase. No decision has yet been made. A short statement can be read below.

There are some articles on the acquisition of Kadokawa Corporation (hereinafter “the Company”) by Sony Group Inc. However, this information is not announced by the Company. The Company has received an initial letter of intent to acquire the Company’s shares, but no decision has been made at this time. If there are any facts that should be announced in the future, we will make an announcement in a timely and appropriate manner.


Thanks to fellow Beat writers Adam Wescott and Joel Savill for their insight on this topic.