Sony has increased its shares in Kadokawa, a major Japanese company that owns FromSoftware as well numerous anime companies, and is entering into an agreement to great expand Kadokawa’s influence.

A few weeks ago it emerged that Sony was seemingly making overtures toward Kadokawa, seemingly intended on trying to acquire the company. Both Kadokawa and Sony officially commented, with Kadokawa confirming that it had recieved a letter of intent from Sony.

Today both companies confirmed that Sony has increased its shares as the pair enter into a “strategic capital and business alliance.” Sony previously held shares in Kadokawa but has now increased its holdings to to 10%, making it the biggest shareholder. Tencent is the second largest, holding 6.8% of the shares.

It’s still possible that Sony is intended on a full buyout eventually and is simply taking a slower approach.

The deal between the two companies goes far beyond just shares though, as Sony is entering into an agreement with Kadokawa to help Kadokawa adapt its many IP into live-action film and TV, as well as co-producing anime works and expanding Kadokawa’s distribuition network.

As Sony’s press release says, the two companies “intend to further strengthen [their] collaboration to maximise both companies’ IP value globally and facilitate wider and deeper collaboration.”

I can only assume they cut off the press release round about the time Sony started talking about world domination.

As a gamer my natural inclination is to focus on the videogame aspects of this deal, of which there are a few. Kadokawa’s gaming jewel is, of course, the mighty FromSoftware who has made the likes of Elden Ring and Sekiro. But Kadokawa also owns other successful studios such as Spike Chunsoft, the developers of Dragon Ball: Sparking Zero which managed to sell over 3 million copies over 24 hours.

It’s worth remembering that Sony also owns a 14% stake in FromSoftware.

However, as successful as its gaming division is Kadokawa actually generates far more from its anime and managa projects than it does videogames, which is likely the biggest reason for Sony seeking to work with the company. Sony has already make some inroads into anime over the years, but Kadokawa is a dominant force in the market. Sony’s distribuition presence in the west will undoubtedly help Kadokawa expand its anime empire across the globe.

I also think it’s fair to assume Sony will want to have some of its own IP adapted by Kadokawa. Horizon anime and manga, anyone?

“We are very pleased to conclude this capital and business alliance agreement with Sony,” said Kadokawa CEO Takeshi Natsuno. “This alliance is expected to not only further strengthen our IP creation capabilities, but also increase our IP media mix options with Sony’s support for global expansion, allowing us to deliver our IP to more users around the world. We are confident that this will greatly contribute to maximising the value of our IP and increasing our corporate value in the mid- to long-term. We intend to do our utmost to ensure that our collaborative efforts with Sony produce great results in the global market.”

“Through this capital and business alliance, we will become the largest shareholder of Kadokawa, which consistently creates a wide variety of IP, including publications and books, such as light novels and comics, as well as games and anime,” said Sony president, COO and CFO Hiroki Totoki. “By combining Kadokawa’s extensive IP and IP creation ecosystem with the strengths of Sony, which has promoted the global expansion of a wide range of entertainment, including anime and games, we plan to work closely together to realize Kadokawa’s ‘Global Media Mix’ strategy, aimed at maximizing the value of its IP, and Sony’s long-term vision, ‘Creative Entertainment Vision’.”