A prominent activist investor is challenging the leadership of Kadokawa Corporation, the parent company behind the critically acclaimed game Elden Ring. Despite the immense commercial and critical success of Elden Ring, which has sold over 30 million copies globally, a major shareholder, Oasis Management, alleges that Kadokawa’s current CEO, Takeshi Natsuno, has failed to adequately leverage this success for maximum profit. This dispute highlights growing tensions within the company regarding its publishing strategy and overall financial management.
Elden Ring, developed by FromSoftware, a subsidiary of Kadokawa, has achieved phenomenal success since its launch, garnering numerous industry awards and selling tens of millions of units, including its recent DLC, Shadow of the Erdtree, and the multiplayer iteration, Elden Ring Nightreign. However, Oasis Management, now the largest single shareholder in Kadokawa, contends that the company has experienced "profit leakage" by relying on external publishing partners, such as Bandai Namco for global distribution of Elden Ring, rather than aggressively self-publishing to retain a larger share of the revenue.
Oasis Management's concerns are detailed in a recent press release, where they characterize FromSoftware as a "crown jewel asset" whose full economic potential is not being realized under Natsuno's leadership. The investment firm points out that Kadokawa had previously committed to a self-publishing model to enhance its gaming economics, even raising capital in 2022 specifically for this purpose. However, according to Oasis, CEO Natsuno has since deviated from this commitment without providing a transparent explanation or a clear strategic framework for improving the company's financial returns from its gaming ventures.
The investor group emphasizes that their demand is not for immediate self-publishing of every title but rather for greater transparency, disciplined financial management, and a credible long-term plan to maximize value from FromSoftware's significant contributions to the global gaming industry. Beyond the CEO's role, Oasis also calls for broader improvements in corporate governance, capital allocation, cost control, and board oversight within Kadokawa. This push for change is further fueled by other issues, including a substantial data leak in 2024 that resulted in significant financial losses, and investor dissatisfaction over the outcome of a potential acquisition by Sony, which materialized as a less impactful "strategic alliance" with only a 10% stake.
Reports indicate that while Natsuno survived the recent Annual General Meeting, retaining his position as CEO, the precise outcome of the shareholder vote will not be fully disclosed for several days. Should his support have significantly waned, it is anticipated that Natsuno may be compelled to adopt many of the reforms advocated by Oasis Management and other activist shareholders, potentially reshaping Kadokawa's future business strategies and its approach to leveraging its valuable intellectual properties.