Following a meeting with its board of directors earlier today, KADOKAWA CORPORATION announced that FromSoftware would be issuing new shares of its stock to subsidiaries from Tencent and Sony Interactive Entertainment Inc by Third-Party Allotment. A notice was released following the announcement, where KADOKAWA detailed their reasoning for this decision.
According to KADOKAWA, its fundamental goal is to see long-term growth and increasing corporate value in its multifaceted portfolio, that consists of publication, video, game, web service, and educational content, on a global scale. KADOKAWA seeks to expand its video game content, making “the enhancement of capabilities for the creation, development and deployment of game IP” one of its highest priorities. Tencent and Sony are global companies known for their services within communication, social, gaming, digital content, advertising fields. Both companies have acquired capital and entered in collaborative business relationships with KADOKAWA in the past.
FromSoftware is one of the many developers at the forefront of current game development with the success of IPs such as SEKIRO: SHADOWS DIE TWICE and ELDEN RING. Recognizing the importance of FromSoftware’s achievements and how each company shares goals to further new game IP development, KADOKAWA decided to go through with this Third-Party Allotment. This allotment by FromSoftware will invest in the “…development of more powerful game IP for itself to strengthen FromSoftware’s development capabilities and will seek to establish a framework that allows the expansion of the scope of its own publishing in the significantly growing global market.”
Additionally, FromSoftware decided to conduct the Third-Party Allotment to Tencent’s subsidiary Sixjoy Hong Kong Limited and Sony’s subsidiary Sony Interactive Entertainment (SIE) separately. Sixjoy for “its strength in developing and deploy mobile games and other network technologies in the global market including China” and SIE for “its capabilities to deploy IP in games, videos and various other media in the global market.”
Following the Allotment Sixjoy Hong Kong Limited’s shares rose to 16.25%, Sony Interactive Entertainment’s shares rose to 14.09%, and KADOKAWA CORPORATION remained at 69.66%.
Tencent and Sony certainly have the financial power and investment within the video game sphere in their respective regions. Time will only tell what will come from these increased investments into FROM Software, but the potential of future collaborations between these companies is huge. The full financial results of this Third-Party Allotment will be completed by the end of the fiscal year on March 31, 2023. At this time, KADOKAWA the impact of this decision to be minor.