Kadokawa Faces Pressure as Shareholders Push to Remove CEO Over Elden Ring Concerns
Kadokawa, the Japanese entertainment giant best known in gaming as the parent company of FromSoftware, the studio behind Elden Ring and Bloodborne, is facing growing pressure from shareholders.
During the company’s annual general meeting on Wednesday, management will have to deal with a proposal from activist fund Oasis Management seeking to remove current CEO Takeshi Natsuno.
Natsuno, has led the company since 2021 and is being criticized over the group’s declining profitability. Kadokawa’s board of directors has defended him, arguing that removing him would create uncertainty at a time when the company is trying to carry out several reforms. Natsuno also received 90% shareholder support during last year’s meeting.
Kadokawa Under Pressure as Investors Target CEO Takeshi Natsuno
However, the situation has become more difficult. Hong Kong-based Oasis Management is now Kadokawa’s largest shareholder, holding a 13.76% stake. One of the fund’s main criticisms concerns the commercial management of Elden Ring. While the game has been a major success worldwide, Oasis believes Kadokawa failed to fully benefit from that success.
The game is published directly by FromSoftware in Japan, but overseas distribution is handled by Bandai Namco. According to the investment fund, this arrangement resulted in a “material profit leakage” for the company.
Oasis has also gained support from two major shareholder advisory firms. Institutional Shareholder Services (ISS) released a report recommending that shareholders support the proposal, stating, “While it may take time to find a replacement for Natsuno, this is a challenge worth accepting.”
Glass Lewis, a major proxy advisor, has also recommended voting against the reappointment of the current CEO.
In addition, recent financial results have further increased pressure on Natsuno. Last year, Kadokawa, which operates in manga, anime, and video games, reported a return on equity (ROE) of just 0.5%, a sharp drop from 9.4% in the fiscal year that ended in March 2022. In addition, the company reported annual operating profit below expectations in May, despite already lowered forecasts.
A market participant, speaking anonymously to Reuters, said, “Even without Oasis submitting a shareholder proposal, it has become a situation where institutional investors could easily make a no vote.”
Sony’s position remains unclear. The company acquired a 10% stake in Kadokawa in 2024 but declined to comment on how it plans to vote at the upcoming shareholder meeting. As more information becomes available, we’ll make sure to let you guys know here at MP1st.
In other news, Shareholders are pushing for more FromSoftware sequels, but President Hidetaka Miyazaki says the studio’s goal remains creating “valuable games.”
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