Sony's latest acquisition target could be a big win for PlayStation

Sony's latest acquisition target could be a big win for the PlayStation brand, with the Japanese games giant reportedly in talks to buy the parent company who currently owns the iconic developer of Dark Souls.

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Sources tell Reuters that Sony is discussing plans to purchase Kadokawa Group, a leader in Japanese multimedia. Kadokawa is a nearly 80-year old entertainment group mostly known for distributing generations' worth of manga, operating video streaming service Niconico, and for its presence in video games. And Kadokawa just so happens to own FromSoftware, the developer of some of the most celebrated games on the planet.

The acquisition rationale is a strong one for Sony, who could neatly wrap up dominance in both anime and manga by purchasing Kadokawa. Sony already owns both Crunchyroll and Funimation. Folding Kadokawa's mighty print media arm into Sony's established streaming, film, and music businesses could be a major cross-media boon.

As for FromSoftware, Kadokawa Corp. currently has control over the developer. Kadokawa is the majority shareholder with over 66% of shares. In September 2022, both Tencent and Sony purchased a combined 30% of FromSoftware stock for $259 million. As part of the deal, Sony bought 1,476 shares for $120.47 million equating to 14.09% of total shares, and Tencent bought 1,703 shares for $138.97 million equating to 16.25% of total shares.

FromSoftware remains one of the most renown game developers on the market and has enjoyed multiple generations' worth of success. The studio's latest game, Elden Ring, has far surpassed all expectations with an incredible 25 million copies sold, and remains a superstar sensation that helped boost Kadokawa Corp's operating profits by over 1000%.

Acquiring FromSoftware would add meaningful talent to Sony's first-party PlayStation studios brand and also pull in IP ownership of key franchises like Dark Souls and Elden Ring.