Sony has invested 50 billion yen (approx. 318 million US dollars) in FromSoftware parent company Kadokawa, thus preventing a complete takeover for the time being.

The investment makes Sony Kadokawa’s largest shareholder with 10% of the company’s shares. Chinese mega-corporation Tencent is next in line.

Kadokawa and Sony have formed a so-called “Strategic Capital and Business Alliance” with the aim of strengthening Kadokawa’s long list of intellectual properties worldwide.

The deal announcement contains vague corporate talk about how the two companies plan to work together in the future, but there is a line about adapting Kadokawa’s intellectual property into live-action films and TV dramas around the world, co-producing anime -Works and further expansion the publication of Kadokawa’s games.

This phrase in particular has already led to speculation that Sony could help realize a live-action Elden Ring movie or TV series of some sort, but it’s worth noting that Sony’s interest in Kadokawa is largely tied to its anime business tun has his video game business.

Sony boss Hiroki Totoki commented: “Through this capital and business alliance, we become the largest shareholder in Kadokawa, which continuously creates a wide range of intellectual properties, including publications and books such as light novels and comics, as well as games and anime.”

“By combining Kadokawa’s extensive IP and IP creation ecosystem with Sony’s strengths, which has driven the global expansion of a wide range of entertainment properties, including anime and games, we plan to work closely together to develop Kadokawa’s ‘Global Media Mix’ strategy to maximize the value of its intellectual property and Sony’s long-term vision “Creative Entertainment Vision”.

Last month, financial experts said the PlayStation maker may have been put off the deal because of the cost of acquiring Kadokawa in its entirety rather than the parts it was actually interested in.

Kadokawa was reportedly only interested in a deal with Sony if the company bought the entire company. However, Sony was reportedly only interested in “extracting” assets related to anime and video games, which presumably included the developer of Elden Ring.

According to expert estimates, buying Kadokawa would cost 640 billion yen (about $4.3 billion). Due to investments made elsewhere, Sony’s money for acquisitions is apparently tight at the moment. For comparison: Sony bought Destiny developer Bungie for $3.7 billion in 2022. Since then, the studio has had to endure several rounds of layoffs and project cancellations.

There’s also the obvious prospect of a bidding war or the possibility for Sony to buy 50% of Kadokawa and turn it into a subsidiary that it doesn’t fully own.

Kadokawa’s business extends into areas that fit into Sony’s broader entertainment offering, which includes anime, manga, TV and film. Kadokawa is a prolific anime publisher and Sony already owns anime streamers Crunchyroll and Funimation. In addition to FromSoftware, Kadokawa owns Danganronpa developer Spike Chunsoft, Octopath Traveler developer Acquire, and RPG Maker and Pixel Game Maker developer Gotcha Gotcha Games. Kadokawa is the majority owner of FromSoftware with around 70%. Sony already owns around 14% of the developer and Tencent owns around 16%.

Sony has already seen significant layoffs in its gaming division this year and the closure of several studios, including Concord developer Firewalk. In February, it announced a round of layoffs This affects 900 employees, or about 8% of PlayStation’s global workforce. The layoffs affected a number of PlayStation studios, including Insomniac, Naughty Dog, Guerrilla and Firesprite, but the London PlayStation studio was hit hardest by the closure notice.

FromSoftware is currently working on the multiplatform spin-off Elden Ring Nightreign, due out next year.

UPDATE: An earlier version of this story claimed that Sony had become Kadokawa’s majority shareholder, although the company has actually become the largest shareholder. An edit has now been made. We apologize for the error.

Wesley is the UK news editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].