FromSoftware parent company Kadokawa Corporation has announced that it's issuing 3179 new FromSoft shares to Sixjoy Hong Kong and Sony Interactive Entertainment. Sixjoy is a subsidiary brand of Tencent, whom you'll know from having a slice of seemingly every pie known to humankind, and Sony Interactive Entertainment is, well, Sony.
Once the shares are issued, Sixjoy will own 16.25% of FromSoft and Sony 14.09%. Kadokawa Corporation will remain the controller and majority owner of the company by a wide margin: it owns the full 69.66% of remaining shares.
A slight increase in share amount for two companies—even if they are Tencent and Sony—that confers no extra power or rights may not seem enormously interesting, but it's not necessarily the shares that are important here. Kadokawa and FromSoft are acquiring 36,399,550,000 yen (that's £225,677,210 or $262,268,221) off the back of this deal, which they intend to put to good use. In the release announcing the share allotment, Kadokawa says that the reason for the share sale is to use the funds for "the expansion of the scope of [FromSoft's] own publishing in the significantly growing global market".
In other words, the share allotment is all in service of gathering the funds FromSoft needs to start self-publishing its games across the world. FromSoft already publishes its own titles in Japan, but seeks out partners to help it publish in overseas territories. Kadokawa clearly thinks FromSoft has outgrown that kind of arrangement, pointing specifically to the success of games like Sekiro and Elden Ring as reasons that FromSoft is ready to branch out and start self-publishing in countries other than Japan.
The news will be of especial interest to Bandai Namco, which has enjoyed a fruitful partnership with the developer but crucially also has IP rights to certain FromSoft titles. The Souls series and particularly Elden Ring have been smash hits, and Bandai Namco will be looking at this wondering if the studio's next game will be called Aged Loop and cut it out completely.
As for Sony and Tencent (or Sixjoy), all they get from this deal are the potential (and significant) rewards of an investment in a games company that's going from strength to strength. The number of shares they own is still far too small to give them anything like a controlling say in how either Kadokawa or FromSoft do business, although it'll probably make any future discussions between the companies that little bit warmer. Regardless, despite appearances, it's still too early to file this one under the ever-expanding bracket of "videogame industry consolidation".
