KADOKAWA: Media Powerhouse that Crafts Stories that Connects Fans Worldwide.

Can you start with a quick introduction to KADOKAWA and some of your core competencies?

We’re a comprehensive entertainment company, which develops a wide range of businesses such as Publication, Animation, Film, Gaming, Web services, and Education/EdTech. We discover talent globally, create diverse IP (Intellectual property), and deliver it through various media. We maximize the value of IP under our strategy “Global Media Mix with Technology”, which refers to global rollouts of created IP by utilizing technology. So we’re one of the largest book, anime, film and game producers in Japan, but our footprint extends across nearly all areas of entertainment. Even so, we’re actively expanding into new sectors, such as merchandising and the online platform Niconico.

One of Japan’s strengths is the incredible diversity of its culture. Despite being a relatively small country, we produce a vast variety of unique and original content—something that sets us apart from places like South Korea. In fact, countries like South Korea and even Hollywood are constantly looking for original stories to adapt into webtoons, dramas, and films. That’s where the real strength of the Japanese market lies: in its cultural richness and diversity. The stories coming out of Japan are truly unique and special—there’s no denying that.

Take, for example, one of our properties, Bungo Stray Dogs, a manga series written by Kafka Asagiri and illustrated by Sango Harukawa. Another great example is Dungeon Meshi, known internationally as Delicious in Dungeon. It’s a remarkably creative series.

During the COVID-19 pandemic, the younger generation clearly began seeking stories they could relate to—stories that resonated with their own experiences. I believe this trend is closely tied to the internet. When you look at figures like Mark Zuckerberg, you're seeing people who became incredibly wealthy at a very young age thanks to the internet—something that didn’t really happen before 2000. Since then, the wealth gap has become more visible, and that reality continues to shape our world. People today want something they can relate to, something they can depend on emotionally. In this respect, Japanese manga and anime are very unique—they reflect the lives, emotions, and challenges of the times. They feel real and relatable.

When people couldn’t go out during the COVID-19 pandemic, content consumption surged. Subscription services like Netflix and Crunchyroll made it easier than ever to access anime. With anime, we typically produce about 11 episodes in one cour, and if the original writer allows, we tend to release a second season every two years recently.

We produce 40 anime series every year, giving audiences a vast and diverse selection of high-quality content to choose from.

You mentioned the impact of the internet, particularly in the global distribution of anime. Today, however, we’re experiencing what could be considered a second wave of the internet with the emergence of AI—an innovation that significantly affects the creative process, especially for writers. How is Kadokawa approaching AI and other emerging technologies in its operations and creative work?

At this point, we see AI primarily as a support tool, because it still can’t be truly creative on its own. I actually come from the IT industry and still hold a university position as a professor, so I have a fairly strong understanding of this subject.

AI depends on data—large volumes of it—and while this enables the technology to function effectively, it also leads to standardization. That standardization tends to flatten creative expression. AI can reproduce patterns, but it can’t generate the kind of originality that defines powerful storytelling. A series like【Oshi no Ko】, for example, is too imaginative and unconventional—something AI could never come up with on its own.

That’s why, at the moment, we use AI mainly to support artists. Although it is still in the testing phase, for instance, it’s helpful in tasks like coloring animation cels after the drafts are completed. It enhances efficiency without interfering with the core creative process.

When I became head of the company, I told my team that I wanted Kadokawa to become a tech-driven company. My vision was that, by fully embracing technology, we could streamline workflows and free up our creators to focus on developing truly original stories. I see technology and creativity as the two wheels that drive Kadokawa forward—each supporting the other as we move in new and exciting directions.

It’s interesting to hear your focus on efficiency, especially considering that many Japanese animation studios today are grappling with two major challenges: funding and labor shortages—the latter tied closely to Japan’s ongoing population crisis. We’ve seen that Kadokawa is investing heavily in education through initiatives like KADOKAWA SCHOOL OF MANGA, and you're also acquiring animation studios. In your view, what is Kadokawa’s responsibility in today’s evolving anime landscape?

The core issue, in my view, is that there are simply too many companies in Japan. As you probably know, Japan has a far higher number of SMEs compared to major corporations. While this might seem positive on paper, in practice, it leads to inefficiencies.

There are many companies with strong technology or creative potential, but they remain small and cannot utilize that potential, and limit the scale and future of their business. This issue is made worse by the fact that so many of these SMEs are family-run businesses. They tend to lack ambition of expanding or going global.

This dynamic is especially evident in the animation industry. There are so many small studios producing just one or two series a year with fewer than 50 employees. And sometimes, a large portion of that staff consists of executives, accountants, and other non-production roles.

At Kadokawa, we own seven animation studios under our umbrella to give them a solid, centralized structure. This allows us to streamline operations by reducing unnecessary roles and focusing on recruiting the people who matter most: animators and creators. We apply the same structure to our publishing operations. In Japan, the top four publishing companies hold only 20% share of the market, while the others are often SMEs. In terms of economies of scale, the share of profits could be considered more skewed towards the top four.    

Most of these small companies are struggling to survive, but it may be difficult. That’s why we believe consolidation is not only necessary, but urgent. When we acquire smaller studios, they no longer need to worry about building their own sales, marketing, or HR teams—we already have that infrastructure, which will provide various back up functions for the studios. All they need to do is focus on their core strength: creating compelling stories. To sum it up, I believe industry-wide consolidation isn’t just our goal—it’s what the industry needs right now.

Are you providing shared technologies and resources to all of the studios under your umbrella?

Yes, absolutely. For example, one area we’re actively investing in is AI. Introducing AI into the production pipeline takes both time and financial resources—something we’re in a position to provide. One of our business divisions alone employs hundreds of engineers, including specialists in AI. This gives us the internal capacity to properly evaluate how to apply the technology in meaningful, effective ways.

What I want for Kadokawa is to serve as a kind of guardian for our creators, using technology to support and protect their creative freedom, not replace it.

Another example of how we apply innovation is in publishing logistics. The industry still operates under a system where bookstores can return unsold books, and the current return rate is about 40%. That means 40% of books shipped are coming back through the same distribution network. To address this, we built our own factory and logistics infrastructure. As a result, we’ve already reduced our return rate to 26%, well below the industry average. Our goal is to bring that down even further—to around 22%—within the next three to five years, which would naturally contribute to improved profitability.

Across every aspect of our business—from production and distribution to publishing—we’re committed to implementing technology in smart, strategic ways.

Over the past 20 years, Kadokawa has evolved into a fully integrated media mix company. While your core strengths remain in literature and animation, you’ve expanded significantly into areas like merchandising. Managing such a diverse portfolio brings clear advantages, but also some challenges. How do you ensure that you’re maximizing the value of your IPs across these various integrated platforms?

Publishing a book doesn’t grant sole ownership—it’s a collaborative effort involving the writer, the editor, and others. By bringing together the creativity of at least two people, we’re able to generate new content. Many publishers depend on a selected group of manga artists, which limits the number of stories they can produce each year for their weekly magazines. In contrast, our structure allows us to work with a vast network of writers. As a result, we’re able to generate thousands of stories annually.

Of course, as CEO, I can’t personally read all 6,000 books we publish each year. So in reality, I gauge the value of each title based on its performance in the market. Ultimately, it’s the market that decides what’s successful and what isn’t.

In the case of manga and comics, digital now accounts for about 70% of sales, which is a great development. It eliminates the need for logistics and makes tracking performance much easier. Digital data allows us to identify hit series more quickly and accurately.

I believe this approach is one of the key factors that sets us apart from the competition. And when it comes to adapting a property into anime, we only select titles that have already demonstrated success and built a loyal fanbase. This is what I call "Possibility Management"—investing in IPs with proven potential.

To ensure that your studios are equipped with the talent and tools they need, we saw that Kadokawa is investing in education through the creation of a school. Could you tell us more about this initiative and what you hope to achieve with it?

This initiative is about strengthening the value chain of anime production. Through the school, we’re able to cultivate new anime creators who can contribute fresh ideas and talent to the industry.

In your mid-term strategy, one of Kadokawa’s major goals is to become a global platform. To achieve that, you need not only strong capabilities in production and creation, but also robust distribution and the ability to serve as a platform for other companies. Kadokawa already has its own creative and distribution strengths, but what may still be developing is the aspect of acting as a platform for others. What are your thoughts on this, and how do you see Kadokawa evolving in that role?

My perspective is slightly different. Our goal isn’t just to become a platform for companies—it’s to become a platform for creators, helping them connect with audiences. And because we’re aiming for global reach, that also means supporting creators from around the world, not just Japan.

Ideally, we want to build a two-way bridge: bringing content from our overseas subsidiaries into Japan, and exporting Japanese content to international markets where we already have a presence.

To support this, we’ve recently established publishing subsidiaries in several major countries outside of Japan. Last year alone, we launched new companies in France, Indonesia, and South Korea. We also have existing subsidiaries in the U.S., mainland China, Taiwan, Thailand, and others. My goal is to establish a presence in as many countries as possible. This expansion allows us to source compelling original stories. For example, we’ve acquired Boys Love titles from Thailand that are now being translated into Japanese and English. Malaysia has been another strong source, particularly for educational content X-Venture Primal Power that we’re already selling in Japan and the U.S.

At the moment, about 3.6% of our works are original from outside Japan. I’d like to raise the ratio of original works from overseas to 20% or even 30% in our total number of overseas publications in the future.

One challenge we’ve identified is that digital platforms aren’t performing well outside Japan—especially in the U.S. and Europe, where digital comic sales remain low. Readers still prefer physical books. But to sell physical books, you need a robust distribution network. That’s why having an entity in each country is absolutely essential, and working with local partners is key.

For instance, in the U.S., we operate Yen Press, which is jointly owned by Kadokawa and Hachette Book Group. Hachette’s distribution network ensures that our manga is delivered nationwide—and they’ve been very pleased with the partnership. In France, we have a similar arrangement with Média-Participations Paris. This same model applies to  the major markets where we operate.

Delicious in Dungeon

©Ryoko Kui 2015 / KADOKAWA CORPORATION

Published by Yen Press, LLC

What qualities or capabilities define an ideal partner for Kadokawa as you continue expanding globally?

First and foremost, our ideal partner must have a genuine interest in Japanese comics. Right now, publishing is shrinking globally—except for manga interestingly. Manga is one of the few segments that's still growing, and everyone wants it in their distribution lineup.

Companies like Média-Participations Paris benefit enormously from this trend because manga is such a hot item, and we’re able to offer a wide variety of titles. All they need to do is distribute through their existing networks. That’s why partners enjoy working with us—it’s a mutually beneficial arrangement.

Are you solely focused on forming partnerships, or are you also open to acquiring some of these publishing entities as part of your global strategy?

Yes, of course—we’re actively looking to acquire. Kadokawa’s current valuation is over JPY 500 billion, so we’re still relatively small in the global landscape. As I mentioned earlier, consolidation and integration are key parts of our strategy, and acquisitions are a natural step toward achieving that.

There are still several markets we haven’t entered, particularly in South America and the Middle East. Russia is also a significant market with a strong anime fanbase, but given the current conflict, making any deals there is quite difficult.

Kadokawa has been active in mergers and acquisitions recently, including the acquisition of Chiptune in February 2025. Could you tell us more about your recent M&A activities and the strategic thinking behind them?

In the anime space, we’re already partnered with major global platforms like Netflix, Amazon Prime, and Crunchyroll, so we don’t need to worry much about global distribution—our content is reaching audiences worldwide.

The main challenge in anime today is the production capacity. That’s why we’re focusing our M&A strategy on acquiring animation studios and functional companies that support the production pipeline. By bringing these capabilities in-house, we’re making our content creation process more efficient. We’re taking a more aggressive approach to consolidating studios under the Kadokawa umbrella to strengthen our position and streamline production.

What synergies do you expect to gain from your acquisitions of Chiptune and Doga Kobo?

Chiptune plays a different role compared to our animation studios—it provides essential functionality that supports real production work. Having a company like this under our umbrella is very important to us, as it significantly speeds up the production process for our studios and strengthens our overall capabilities.

Shifting to live-action films, I have to be honest—Japanese live-action cinema is facing a tough time right now, with the exception of Godzilla Minus One. That film was a major hit in the United States and even won an Oscar. I was truly surprised that a Japanese-language film, available only with subtitles, could earn over USD 55 million in the U.S. That’s something we’ve never seen before. I believe the impact of COVID-19 led Americans to watch more Japanese content at home with subtitles than ever before, and they gradually became accustomed to it. That phenomenon played a significant role in the film’s success.

As for why it resonated, I think it comes down to the variety and uniqueness of the content. American films often follow predictable formulas—with invincible heroes and unrealistically beautiful female leads, and they almost always end on a happy note. I think audiences are starting to crave stories that feel more grounded and authentic.

In Godzilla Minus One, the protagonist isn’t a superhero—he’s just an ordinary person. That’s something you often see in Japanese storytelling. It’s more human, more relatable, and I think that’s what struck a chord with global audiences.

Trading card games like Pokémon, One Piece, and Magic: The Gathering are currently experiencing a huge surge in popularity in Western markets. Is this a space Kadokawa is looking to explore or expand into?

Properties like Hello Kitty and Pokémon have been global hits even before COVID-19, but I would categorize them as neutral, almost universal characters. Hello Kitty, for instance, doesn’t have a defined nationality—it’s a character that transcends borders. These are what I consider Japanese legacy IPs.

Anime, on the other hand, is clearly recognized as coming from Japan. So I think it's important to distinguish between legacy IPs and other types of IP. With anime, the cultural origin is part of the appeal, and people are very aware that it’s Japanese content.

Kadokawa saw tremendous success through FromSoftware’s Elden Ring. One common challenge for developers and distributors following such a major hit is how to sustain that momentum. Could you tell us more about your pipeline for the video game sector and your expansion plans? How do you intend to build on the success of Elden Ring moving forward?

We’re gradually reducing our dependency on FromSoftware by implementing a broader portfolio strategy. FromSoftware originally operated on a no-risk model, developing games on commission. But we’re working on another strategy, moving toward a model that involves more calculated risk in order to drive growth.

In our video game division, we currently operate two main studios: FromSoftware and Spike Chunsoft. Both are focused on console gaming and have delivered multiple successful titles. At the same time, Kadokawa itself has started developing mobile games. What’s challenging is that Japan’s mobile game market is completely distinct from the console game market—they function almost like separate industries.

Our strategy in mobile gaming is simple and focused: we only develop games based on existing IPs, specifically targeting the Japanese market. Our first title in this space was Kage no Jitsuryokusha ni Naritakute!—known internationally as The Eminence in Shadow.

We already have a solid pipeline in place, and our current goal is to release two to three mobile games per year, all based on established IPs. If a particular anime or franchise proves popular internationally, we have the option to export the game to foreign markets as well.

In line with our overall strategy of consolidation—which I mentioned earlier—we’ve also acquired a few game developers, and we see ongoing opportunities for further consolidation in the future.

ELDEN RING

©Bandai Namco Entertainment Inc. / ©2025 FromSoftware, Inc.

Is the esports space something Kadokawa is actively exploring or interested in pursuing further?

Due to strict regulations, esports are quite difficult to handle in Japan. Many in Japan are trying to join the e-sports world by playing titles such as League of Legends (LOL), but none of these esports titles are Japanese.

One of the major recent developments for Kadokawa is your capital alliance with Sony, which is now your largest shareholder with a 10% stake. Why was now the right time to move forward with this partnership, and what are your expectations for this enhanced collaboration?

We already had a strong relationship with Sony, particularly through our collaboration in anime with Crunchyroll. The PlayStation brand has also been very supportive of our efforts. This capital alliance strengthens that existing relationship and creates more direct communication with Sony’s executives, which in turn connects us to a wider network of gaming-related companies.

Ultimately, this partnership serves as a catalyst—it encourages more collaboration across different sectors and motivates people within the industry to work together more closely.

Kadokawa’s mid-term strategy, which runs through 2027, includes key targets such as reaching JPY 340 billion in revenue, with JPY 70 billion coming from overseas markets. Now that we’re in 2025 and halfway through this plan, how is the progress so far? What do you see as the key steps needed to achieve your final targets?

We’re on track overall, but in 2024 we suffered from a cyberattack that resulted in a loss of about JPY 4.95 billion in profit. That incident had a significant impact, but we believe we can recover that loss. If it hadn’t been for the cyberattack, our performance would be much stronger at this point in the plan.

What was your personal reaction to the cyberattack, and how has it influenced your perspective on the company’s operations or priorities?

Our cybersecurity standards are actually quite high—in fact, we handle a lot of cyberattacks every day. That volume is largely because of Niconico, which is Japan’s second-largest video streaming platform and naturally a major target.

In this particular case, the breach began with malware. The challenge with malware is that it’s incredibly difficult to prevent entirely, especially when you can’t monitor every engineer’s activity down to the smallest detail. It was an unfortunate situation, but we’re confident that we can recover the losses. Even with the cyberattack, we’re still on track to achieve our mid-term goals, which is encouraging.

When you first joined Kadokawa, what was the most important change you introduced—not just to the company, but to the industry as a whole?

As we’ve discussed today, many industries in Japan are made up of small, fragmented companies. Most CEOs in these companies are focused solely on their own narrow industry, but they’re missing a crucial point: technological evolution is breaking down barriers between industries. The lines are becoming increasingly blurred, and the potential to cross into new sectors is growing.      

I came from the IT world before moving into publishing, and I know firsthand how much can be transformed through the application of new technologies. Serving as a board member at NTT DOCOMO, INC., a major corporation, gave me even broader perspective. One of the most important lessons I learned is that companies overly reliant on a single individual simply are difficult to survive. It’s an unsuccessful business model.

I also learned from Silicon Valley that money is a major motivator—and we should pay our people more, plain and simple. If we need to pay Mr. Hidetaka Miyazaki more, I have no problem with that. He’s behind Elden Ring, a massive global success, and he brings immense value to the company. That’s my responsibility as CEO—to recognize and reward talent appropriately.

I travel constantly, meeting people face-to-face and actively engaging in the global market. Direct communication is something I value deeply. To summarize, Japanese managers must evolve. They need to develop a more global perspective, or they risk being left behind.

You’ve clearly been a transformative leader for Kadokawa—growing the company’s valuation and revenue while aggressively expanding into new sectors and acquisitions. Looking ahead, what’s next? What are your goals for the future, and what do you hope to accomplish as CEO of Kadokawa?

Right now, my focus is on discovering talent from all over the world—whether that’s writers, singers, artists, or coders. A great example is a music artist Ayase who created the opening song of【Oshi no Ko】—many of the artists came from our Niconico platform, which has essentially become a kind of debut stage for creators. In fact, the team at Sony Music often scouts talent directly from our platform.

At its core, I believe Kadokawa’s mission is to find and nurture creative talent, helping individuals reach their full potential. If we can do that, we’ll be able to deliver meaningful stories and experiences that bring happiness to people all around the world.

For more information, please visit their website at: https://group.kadokawa.co.jp/global/