Hong Kong-based Tencent Holdings Limited and Japan-based Sony Group Corporation have acquired 30.34 percent stake in Japanese game developer FromSoftware for 36.4 billion yen ($259.48 million).

FromSoftware parent firm Kadokawa Corporation said in a statement on Wednesday that it has issued FromSoftware shares to Tencent’ subsidiary Sixjoy Hong Kong Limit and Sony’s subsidiary Sony Interactive Entertainment Inc.

Following the deal, Sixjoy and Sony Interactive Entertainment will hold 16.25 percent and 14.09 percent stake in FromSoftware. The remaining 69.66% shares are owned by Kadokawa.

On purposes of and reason for the third-party allotment, Kadokawa said it advocates a “global media mix with technology” as its fundamental strategy that combines the stable creation of intellectual property (IP) consisting of a variety of portfolio content chiefly in the publication, video, game, web service, and education businesses as well as the rollout of this IP on a global scale through the extended use of technology, seeking to achieve sustained growth and enhance corporate value from medium- to long term perspectives.

FromSoftware is driving the game business as it has continually been creating world-famous works, such as Sekiro: Shadows Die Twice and Elden Ring, leveraging its advanced game IP development strength.

With an eye on further expansion of the game business, the group recognizes the enhancement of capabilities for the creation, development and deployment of game IP as one of the group’s highest priorities.

In line with this policy, the company has decided to have FromSoftware implement fund procurement by way of a third-party allotment to Sixjoy and Sony Interactive Entertainment.

Tencent acquired capital in Guangzhou Tianwen Kadokawa Animation and Comics Co., Ltd., a consolidated subsidiary of the company, in 2016, and the two companies have been jointly promoting their media mix strategy targeting the Chinese market.

In addition, the company, Sixjoy and Tencent Japan entered into a capital and business alliance agreement as of October 2021 to strengthen their strategic alliance in the anime and game fields.

Tencent and its subsidiaries and affiliates are a global internet group that provides communication, social, gaming, digital content, advertising, fintech and cloud services, and operates the leading communication and social platform in the Internet industry in China.

Meanwhile, Sony and its subsidiaries and the company have developed a collaborative business relationship across a wide range of areas related to the Sony Group’s global direct-to-consumer (DTC) business operations, branded hardware business and games business.

In February 2021, the company conducted a third-party allotment with Sony as the allottee with the aim of strengthening its relationship with the Sony Group over the long term, and creating new IP of the company and maximizing the utilization of its existing IP in anime and game fields.

Through the implementation of the fund procurement, FromSoftware will aim to proactively invest in 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.

In addition to these purposes, for an increase of the number of users in the global market for game IP that FromSoftware creates and develops, FromSoftware decided to conduct the
third-party allotment to Sixjoy within the Tencent Group, which has strength in its capabilities to develop and deploy mobile games and other network technologies in the global market including China, and Sony Interactive Entertainment within the Sony Group, which has strength in its capabilities to deploy IP in games, videos and various other media in the global market, concurrently and separately.

Kadokawa also believes that the third-party allotment will contribute to the medium- to long-term improvement of the group’s corporate value.

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