The past two years have been filled with gaming acquisitions. The biggest one is Microsoft's purchase of Activision Blizzard. But, we shouldn't be quick to forget that Take-Two Interactive is also the owner of Zynga now, while Embracer Group bought a whole bunch of other small-time game developers and Square Enix's western subsidiaries. There's also Sony and its buyout of Bungie, the developers behind both Destiny titles and the original Halo games.
But, it appears that we're not done with gaming deals just yet. Sony, in particular, has purchased a substantial stake in the Kadokawa Corp subsidiary, FromSoftware. Tencent, one of the biggest companies in China, also bought a stake in the studio through its subsidiary, SixJoy Hongkong Ltd.
Sony has purchased 14.09% of FromSoftware while Tencent has acquired 16.25%. Kadokawa Corp still owns a majority of the game developer with a 69.66% ownership share.
Kadokawa Corp stated that the sale strengthens FromSoftware’s "capabilities to create and develop game IP." The merger also allows the studio to "establish a framework that allows expansion of the scope of FromSoftware’s own publishing in the global market. "
The deal should have only a minimal effect in terms of earnings from FromSoftware for the year. The acquisition will have a medium to long-term benefit for all parties involved.
Who is Tencent?
Tencent is a media giant based in Shenzen, China. It's a major player in video games, social media, and entertainment. The company owns Riot Games, the developer behind the popular League of Legends and Valorant.
Tencent also owns Funcom, the creator of the survival game Conan Exiles and the upcoming Dune: Awakening game. The company most recently purchased Turtle Rock, a former Valve studio that's responsible for making the seminal co-op shooter series, Left 4 Dead. It has a stake in several other game studios like Supercell makers of the hit mobile game Clash of Clans and Grinding Gear Games who developed Path of Exile. Finally, Tencent owns a 40% share in Epic Games and investments in other gaming companies such as Ubisoft as well as Kadokawa Corp, among several others.
Good for gamers
The deal was made via a third-party allotment which means that Kadokawa Corp chose the companies that could buy its shares. The deal is worth $261 million which will be used by FromSoftware as capital for future games.
The deal also limits the possibility that FromSoftware would be purchased entirely by another gaming company. Having Tencent and Sony onboard will shield FromSoftware from other parties interested in taking over the Elden Ring developer.
In the past, FromSoftware relied on publishers to distribute its games thus giving them control over the future of an IP, such as whether the game gets DLCs or a sequel. For example, Bandai Namco has the say in the direction of Elden Ring. But, with the cash infusion from Sony and Tencent, FromSoftware will be able to produce and publish its own games. This will give it full control over its future IPs.
Speaking of Elden Ring, this year's frontrunner for Game of the Year is still a hot topic half a year since it came out. Players are still spending inordinate amounts of time in the open-world RPG title. One such player even maxed out their playing time in Elden Ring. Another player also received a commemorative gift from Bandai for all of their efforts in helping other players out. But, for all the talk, Elden Ring still hasn't gotten a DLC. Fans are hoping that FromSoftware and Bandai Namco are cooking up something big for the studio's best-selling title.