Is Kadokawa profitable in 2026?

Kadokawa remains profitable but barely: FY ended March 2026 net profit collapsed 82.7% to just ¥1.278 billion from ¥7.392 billion the prior year, even as sales rose 1.8% to ¥282.91 billion, per results reported 2026-06-25.

Who owns Kadokawa now?

No single owner controls Kadokawa. Activist fund Oasis Management is the largest shareholder at 15.25% as of June 23, 2026, ahead of Sony (~10%, since January 2025) and Tencent (7.97%, March 2025), with Oasis campaigning to remove the CEO.

Could AI replace Kadokawa?

Unlikely soon. Kadokawa uses AI only for production support like anime coloring and translation, while leading an 18-company statement on October 31, 2025 against OpenAI's Sora 2 and winning a Tokyo court judgment against Cloudflare on November 19, 2025 as a rights-holder, not a victim.

Who is Kadokawa's biggest competitor threat?

The sharpest pressure isn't a rival studio but activist investor Oasis Management, which raised its Kadokawa stake to 15.25% by June 23, 2026, publicly pushing for CEO Natsuno's removal and restructuring of FromSoftware's publishing economics.

How valuable is FromSoftware to Kadokawa?

FromSoftware, roughly 70% owned by Kadokawa, reported FY2024 revenue of ¥23.50 billion and net income of ¥6.62 billion; its Elden Ring franchise had sold about 30 million copies as of June 2026, per reporting on that date.

Did Kadokawa suffer a major cyberattack?

Yes. A BlackSuit ransomware attack hit Kadokawa and Niconico between June and August 2024, leaking data on 254,241 users; Kadokawa reportedly paid about $2.98 million in ransom, according to a report dated December 13, 2024.

Gaming companies · Japan

Kadokawa Corporation

kadokawa.co.jp ↗

Japanese publisher and games group that owns FromSoftware and major anime/manga IP.

Defensible for now

Assessed 23 July 2026 · Evidence as of 23 July 2026

Real protection, with named pressure against it.

On the recordSince 23 July 2026 · Checkable from August 2026 · Every call on the record Checkpoint: Elden Ring Tarnished Edition launches on Switch 2, testing FromSoftware demand and investor sentiment

The call

Kadokawa's IP and legal wins protect it from AI scraping, but an activist investor now controls enough shares to reshape who runs the company.

Kadokawa owns light novels, manga, and video game studios like FromSoftware, plus decades-long relationships with creators and legal control over who can use these stories. This library is genuinely hard to copy or replace because competitors like Sony and Tencent would need years and billions to build the same creative relationships and rights; AI tools like OpenAI's new video generator could eventually threaten some anime work, but Kadokawa is currently suing AI companies rather than being hurt by them. However, the company is in the middle of a messy ownership fight where activist investor Oasis Management (now the largest shareholder) is trying to replace the CEO, staff support for the current leader has dropped from 90 percent to 60 percent, and profits fell 83 percent last year, which means the next year or two could bring sudden management changes, restructuring, or asset sales that shake up the company even if the franchises themselves stay valuable.

Why

AI pressure: OpenAI Sora 2. Sora 2 can generate anime style video from prompts, so Kadokawa sued OpenAI in Oct 2025 and won a Cloudflare ruling in Nov 2025. Could AI do the core job? Unlikely.

Bigger players: Sony Interactive Entertainment and Tencent. Both hold direct stakes in FromSoftware itself and minority stakes in Kadokawa, giving them leverage over its most valuable studio. Could a giant copy it? No, they are blocked.

What protects it. Decades of owned IP, creator contracts, and court wins against AI scraping give Kadokawa leverage few rivals have.

What would change this call

Oasis forces CEO removal vote or Natsuno exits within 6-12 months. Would show governance conflict escalating into leadership change and operational disruption.
JFTC issues findings on Freelance Protection Act complaint (100+ freelancers). Would show regulatory risk to creator relationships materializing beyond activist pressure.
Elden Ring Tarnished Edition (Switch 2, Aug 2026) and Duskbloods sales results. Would show whether FromSoftware's commercial engine remains strong under governance strain.

Key numbers

Oasis Management stake reached 15.25% (2026-06-24)
CEO re-election support fell to 59.68% (2026-06)
FY2025 net profit fell 35.1% to about ¥9.9B (2025-06-05)

Named risks

Activist-driven governance crisis with CEO removal threat from Oasis Management. Severity: high
FY2026 net profit collapsed 82.7% YoY on weak title hit-rate. Severity: high
Pending second JFTC regulatory action over freelancer contract violations affecting 100+ freelancers. Severity: medium
Repeat cybersecurity exposure after 2024 BlackSuit ransomware breach of 254,241 users' data. Severity: medium
Overreliance on isekai-style hit patterns amid rising anime title counts diluting margins. Severity: medium

Rivals, as read in July 2026

Rival	Direction	Evidence
Sony	contesting	Sony holds ~10% Kadokawa stake since Jan 7 2025, chose alliance over full takeover
Tencent	contesting	Tencent raised Kadokawa stake to 7.97% on 2025-03-04, holds ~16% of FromSoftware directly
Oasis Management	gaining on	Oasis raised stake to 15.25% by 2026-06-23, pushing to remove CEO Natsuno
OpenAI (Sora 2)	contesting	Kadokawa led 18-company statement 2025-10-31 and won Cloudflare judgment 2025-11-19

Questions people ask

Is Kadokawa profitable in 2026?: Kadokawa remains profitable but barely: FY ended March 2026 net profit collapsed 82.7% to just ¥1.278 billion from ¥7.392 billion the prior year, even as sales rose 1.8% to ¥282.91 billion, per results reported 2026-06-25.
Who owns Kadokawa now?: No single owner controls Kadokawa. Activist fund Oasis Management is the largest shareholder at 15.25% as of June 23, 2026, ahead of Sony (~10%, since January 2025) and Tencent (7.97%, March 2025), with Oasis campaigning to remove the CEO.
Could AI replace Kadokawa?: Unlikely soon. Kadokawa uses AI only for production support like anime coloring and translation, while leading an 18-company statement on October 31, 2025 against OpenAI's Sora 2 and winning a Tokyo court judgment against Cloudflare on November 19, 2025 as a rights-holder, not a victim.
Who is Kadokawa's biggest competitor threat?: The sharpest pressure isn't a rival studio but activist investor Oasis Management, which raised its Kadokawa stake to 15.25% by June 23, 2026, publicly pushing for CEO Natsuno's removal and restructuring of FromSoftware's publishing economics.
How valuable is FromSoftware to Kadokawa?: FromSoftware, roughly 70% owned by Kadokawa, reported FY2024 revenue of ¥23.50 billion and net income of ¥6.62 billion; its Elden Ring franchise had sold about 30 million copies as of June 2026, per reporting on that date.
Did Kadokawa suffer a major cyberattack?: Yes. A BlackSuit ransomware attack hit Kadokawa and Niconico between June and August 2024, leaking data on 254,241 users; Kadokawa reportedly paid about $2.98 million in ransom, according to a report dated December 13, 2024.

Timeline

2026-06-29Oasis calls June 2026 AGM a turning point after CEO support collapse
2026-06-25FY2026 results show net profit down 82.7% to ¥1.278B
2026-06-24Oasis Management raises Kadokawa stake to 15.25%
2026-06-09Reports surface of second pending JFTC warning against Kadokawa
2026-05-20Oasis publicly urges investors to vote against CEO Natsuno
2026-03-19Oasis Management discloses 8.86% Kadokawa stake
2025-11-19Kadokawa and peers win Tokyo court judgment against Cloudflare
2025-10-31Kadokawa joins 18-company statement against OpenAI's Sora 2
2025-03-04Tencent raises Kadokawa stake to 7.97%
2024-12-19Sony and Kadokawa announce strategic capital alliance, Sony to hold ~10%

Revision history

23 July 2026

First assessed. Defensible for now. The text above is fixed as of this date and is not edited afterwards.

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