The world of gaming has just witnessed a phenomenon: Elden Ring, a title that didn’t just sell well, but broke records. With sales numbers soaring past 30 million copies and further boosted by massive DLC success and multiplayer expansion, FromSoftware’s world-building has captivated millions. But while the game is celebrated for its immersive experience, behind the scenes at its parent company, Kadokawa Corporation, a much more complicated story is unfolding—a high-stakes battle over where that phenomenal success should be reinvested.
The spotlight, however, isn’t on Tarnished and spectral lands; it’s focused squarely on corporate strategy. A recent report signals that substantial shareholders within Kadokawa are growing impatient with CEO Takeshi Natsuno, arguing that the company has failed to capture the full economic value generated by Elden Ring’s phenomenal run. Simply put, the focus has shifted from celebrating game sales to scrutinizing profit distribution.
This tension is being amplified by activist investors. Oasis Management, described as one of Japan’s most active investors, has emerged as a major player, holding nearly 14% of Kadokawa’s shares and demanding radical change. Oasis views the legendary FromSoftware titles, particularly Elden Ring, as a “crown jewel asset,” but insists that management has allowed money to slip away through external publishing partnerships.
The core accusation revolves around what some are calling “profit leakage.” While Kadokawa publishes titles like Elden Ring in Japan, global success is often handled by third-party publishers like Bandai Namco. Activist investors argue this arrangement results in a significant and ongoing loss of value for all stakeholders, leaving the parent company unable to maximize its potential earnings from its most valuable intellectual property.
Oasis has long advocated for a more ambitious approach to capitalizing on FromSoftware’s global success. They point out that management had previously committed to self-publishing under a mid-term plan and raised funds in 2022 to pursue this goal. However, the report notes that CEO Natsuno has since retreated from this commitment without providing shareholders with a clear economic framework or decision criteria for how Kadokawa will improve gaming economics.
Oasis is not demanding an immediate self-publishing mandate for every title. Instead, their primary request centers on transparency, discipline, and a credible plan detailing how the company will capture more value from one of the most important assets in the global gaming industry. They also push for broader improvements in governance, capital allocation, and cost discipline across the entire organization.
The financial friction extends beyond just Elden Ring. Shareholders are also reportedly unhappy with the handling of other company matters, including past data leaks that reportedly cost the corporation millions. Furthermore, a hoped-for acquisition by Sony, which was anticipated by investors, evolved into a more modest strategic alliance where Sony secured a 10% stake.
As shareholders prepare for upcoming general meetings, the fate of Kadokawa and its future strategy hangs in the balance. Whether CEO Natsuno will successfully navigate these demands, or if shareholder pressure forces a change in direction, remains to be seen as the company seeks to reconcile creative success with financial accountability.
Buy on Amazon
Credit: PC Gamer
