Kadokawa CEO Retains Position Amidst Plummeting Shareholder Support and Mounting Activist Pressure Over Elden Ring Profits

Tokyo, Japan – June 25, 2026 – Takeshi Natsuno, the Chief Executive Officer of Kadokawa Corporation, the Japanese media conglomerate and parent company of acclaimed video game developer FromSoftware, has narrowly retained his leadership position following a contentious Annual General Meeting (AGM). While Natsuno successfully fended off an activist investor campaign aimed at his ouster, the vote revealed a stark decline in shareholder confidence, casting a long shadow over his continued tenure and the company’s future strategic direction.

Shareholder support for Natsuno plummeted from a robust 90% just 12 months prior to a mere 59.68% at this year’s meeting. This significant erosion of backing underscores deep-seated concerns among investors, particularly those articulated by Hong Kong-based activist investor group Oasis Management, which spearheaded the campaign to replace the CEO. Oasis Management has openly criticized Kadokawa’s perceived failure to adequately capitalize on the monumental global success of FromSoftware’s action RPG, Elden Ring, alleging a "material profit leakage" from the blockbuster title.

The outcome of the AGM, while preserving Natsuno’s role for now, serves as a powerful mandate for change within Kadokawa’s upper echelons. The company has publicly committed to reviewing its management structure, executive compensation policies, and the progress of its medium-term business plan, indicating a direct response to the pressure exerted by its increasingly vocal shareholder base.

The Genesis of Discontent: Oasis Management’s Campaign for Change

Oasis Management, known for its assertive approach to corporate governance, initiated its campaign with a clear objective: to replace Takeshi Natsuno. Their central argument revolved around the notion that Kadokawa had not fully leveraged the immense commercial and critical success of Elden Ring. The activist group contended that the company had missed opportunities to maximize revenue and profit streams from the intellectual property (IP), thus leading to a "material profit leakage" that disadvantaged shareholders.

This "profit leakage" claim suggests that while Elden Ring generated substantial sales, Kadokawa’s broader strategy for the IP — encompassing merchandise, spin-off titles, licensing deals, and other synergistic ventures — was insufficient or underdeveloped compared to industry best practices for managing a global phenomenon. Oasis Management’s detailed proposals included calls for greater transparency, more aggressive global expansion strategies, and a clearer roadmap for monetizing Kadokawa’s vast portfolio of IPs, particularly those with the proven appeal of FromSoftware’s creations.

The activist group’s influence within Kadokawa’s ownership structure has grown significantly. In March, Oasis Management announced that it had surpassed Sony as Kadokawa’s largest shareholder, acquiring an 11.89% stake, compared to the PlayStation firm’s 10.04%. This elevated position granted Oasis Management substantial leverage, enabling them to amplify their demands and rally other disillusioned shareholders.

Further bolstering Oasis Management’s position, Institutional Shareholder Services (ISS), another influential activist group, lent its support to the call for Natsuno’s replacement. In a proxy report, ISS articulated that "While it may take time to find a replacement for Natsuno, this is a challenge worth accepting." This endorsement from a respected proxy advisory firm undoubtedly swayed a portion of the institutional investor base, contributing to the dramatic reduction in Natsuno’s support. The collective pressure highlights a growing trend among investors to demand more aggressive commercialization of valuable assets, even from traditional Japanese conglomerates often perceived as more conservative in their business practices.

Elden Ring’s Phenomenal Success: A Double-Edged Sword

At the heart of this shareholder dispute lies Elden Ring, a title that transcended the niche appeal of FromSoftware’s previous "Soulslike" games to become a global cultural phenomenon. Released in 2022, Elden Ring garnered universal critical acclaim, winning numerous Game of the Year awards and captivating millions with its expansive open world, challenging combat, and intricate lore.

The commercial impact was immediate and profound. As of April 2025, Elden Ring has sold over 30 million copies worldwide across all platforms. Its highly anticipated downloadable content (DLC), Shadow of the Erdtree, released more recently, has also achieved remarkable success, shifting more than 10 million units independently. This unprecedented performance directly translated into a massive boost for Kadokawa’s financials, with the company’s games business experiencing a staggering 123% increase in revenue following Elden Ring‘s launch.

Ironically, it is precisely this colossal success that has fueled investor discontent. Oasis Management’s argument is not that Elden Ring failed, but rather that Kadokawa failed to fully capitalize on its extraordinary potential. For an IP that has demonstrated such immense market appeal and generated such significant initial returns, investors expect a comprehensive, multi-faceted strategy to extend its lifecycle and revenue streams far beyond initial game sales. The perceived gap between the game’s intrinsic value and Kadokawa’s exploitation of that value formed the core of the activist campaign.

Kadokawa’s Official Response and Future Commitments

In the aftermath of the contentious AGM, Kadokawa Corporation issued a statement acknowledging the shareholder feedback and outlining its immediate steps. The company affirmed its commitment to a thorough review of its management structure, executive compensation policies, and the progress of its existing medium-term business plan. This public pledge signals a recognition of the serious concerns raised by its investors and an intent to address the perceived shortcomings.

The review of the management structure will likely examine the efficacy of the current leadership team, decision-making processes, and the allocation of responsibilities, particularly concerning IP monetization and global strategy. Executive compensation, a frequent target of activist investors, will be scrutinized to ensure it is aligned with shareholder value creation and performance metrics. If Oasis Management’s claims of "profit leakage" hold water, it could suggest that current compensation structures do not adequately incentivize aggressive IP commercialization.

Furthermore, the re-evaluation of the medium-term business plan indicates a potential strategic pivot. Companies like Kadokawa typically outline multi-year strategies for growth, diversification, and market penetration. The current review suggests that the existing plan may be deemed insufficient in its approach to high-value assets like Elden Ring or that its execution requires significant overhaul to meet investor expectations for maximizing returns. For Natsuno, these commitments represent a critical opportunity to regain trust and demonstrate a proactive approach to shareholder concerns, though he will operate under intense scrutiny.

Chronology of Key Events and Investments

The current situation at Kadokawa is the culmination of several key developments over the past decade, highlighting both the growth of FromSoftware and the evolving investor landscape within the Japanese media sector.

• 2014: Kadokawa acquires FromSoftware. At the time, FromSoftware was renowned for its cult hit "Souls" series, but its broader commercial potential was yet to be fully realized. The value of the deal was not disclosed, but it positioned Kadokawa as a significant player in the high-end console game development space.
• 2022: Elden Ring is released to unprecedented critical and commercial success. This marks a pivotal moment for both FromSoftware and Kadokawa, significantly boosting the latter’s gaming division revenues and establishing the IP as a global entertainment powerhouse.
• March 2025 (approximate): Oasis Management publicly announces it has become Kadokawa’s largest shareholder, surpassing Sony. This move signals their intent to actively influence corporate governance and strategy.
• April 2025: Kadokawa announces updated sales figures for Elden Ring, confirming over 30 million units sold for the base game and over 10 million for the Shadow of the Erdtree DLC, further underscoring the IP’s immense value.
• 2025: FromSoftware releases Nightreign, a multiplayer-focused spin-off title within the Elden Ring universe. This somewhat unusual venture for FromSoftware, which typically focuses on single-player experiences, sells over five million units, demonstrating an early attempt to diversify the Elden Ring IP’s offerings.
• June 25, 2026: The Annual General Meeting takes place, resulting in Takeshi Natsuno retaining his CEO position but with dramatically reduced shareholder support. Kadokawa commits to reviewing its management structure and business plan.
• March 3, 2028: The anticipated release date for the Elden Ring film adaptation, written and directed by acclaimed filmmaker Alex Garland (28 Days Later, Ex Machina, Civil War). This project signifies a major cross-media expansion for the IP.
• Ongoing: Chinese technology giant Tencent maintains a significant stake in Kadokawa, holding 7.97% of the parent company’s shares. This, along with Sony’s continued ownership, highlights the increasing international investment in Japanese entertainment assets.

This timeline illustrates a period of rapid growth and increasing external influence, setting the stage for the current shareholder dispute.

Capitalizing on a Blockbuster: Industry Standards vs. Kadokawa’s Strategy

The core of Oasis Management’s critique lies in a perceived disparity between Kadokawa’s current IP monetization strategy and industry best practices for a blockbuster like Elden Ring. In the modern entertainment landscape, successful video game IPs are transformed into expansive franchises, generating revenue through diverse channels beyond initial game sales.

Major publishers often leverage their most valuable IPs through:

• Sequels and Spin-offs: Developing follow-up games that expand the universe. Nightreign is Kadokawa’s first foray into this for Elden Ring, an unusual move for FromSoftware which typically doesn’t create spin-offs of its core Soulslike titles. While Nightreign has sold a respectable five million units, Oasis might argue for a more aggressive or diverse slate of new game content.
• Downloadable Content (DLC) and Expansions: Shadow of the Erdtree is a prime example of successful DLC, but investors might push for a more consistent content roadmap.
• Merchandise and Collectibles: High-quality figures, apparel, art books, and other collectibles can generate significant ancillary revenue. While Elden Ring merchandise exists, its scale and global distribution could be points of contention.
• Transmedia Adaptations: Films, TV series, anime, and manga adaptations bring the IP to new audiences and create new revenue streams. The Alex Garland Elden Ring film is a monumental step in this direction, lending significant prestige and mainstream appeal. However, its 2028 release date means a substantial waiting period for returns, which could be a factor in Oasis’s impatience.
• Mobile Games: Many successful console IPs are adapted into mobile experiences, often with different gameplay mechanics (e.g., gacha or strategy games) to capture a vast, different demographic. This is an area where Kadokawa may have been seen as lagging.
• Live Service Elements: Incorporating ongoing events, battle passes, or subscription models, though often controversial for single-player focused games, can extend revenue generation.
• Theme Park Attractions and Experiential Entertainment: For truly massive IPs, physical attractions can be highly lucrative.

FromSoftware’s development philosophy, historically, has prioritized artistic vision and meticulous craftsmanship over rapid commercialization or mass-market appeal. Their "Soulslike" genre thrives on challenging gameplay and cryptic storytelling, attracting a dedicated but often niche audience. Elden Ring broke this mold by expanding accessibility without compromising its core identity, hence its broader appeal. However, this artistic integrity might clash with an activist investor’s demand for maximum profit extraction. Oasis Management’s stance suggests they believe there’s a way to achieve both, or at least to lean more heavily on the commercial side without sacrificing quality. The question for Kadokawa is how to reconcile these potentially conflicting objectives.

The Broader Landscape: Activist Investors and Japanese Corporations

The situation at Kadokawa is emblematic of a broader trend in Japan, where activist investors, both domestic and foreign, are increasingly targeting Japanese corporations. For decades, Japanese companies were characterized by cross-shareholdings, a focus on long-term relationships, and a degree of insularity that often prioritized internal stability over aggressive shareholder returns. However, with economic pressures, calls for better corporate governance, and a push for greater transparency, this landscape is rapidly changing.

Foreign investors, like Oasis Management, often bring a more direct and assertive approach, demanding clearer strategies for capital allocation, higher dividends, and more robust IP monetization. This can sometimes create friction with traditional Japanese corporate culture, which might favor consensus-building and a slower, more deliberate pace of change.

The significant stakes held by Sony and Tencent in Kadokawa also underscore the increasing internationalization of ownership within Japanese media and entertainment. These strategic investments can bring capital and global market access, but they also introduce diverse expectations and potential conflicts of interest. Sony, as a major platform holder and publisher, would naturally be interested in the success of FromSoftware’s games, while Tencent, a global gaming and tech behemoth, seeks to expand its influence in the Japanese market. Oasis Management’s role, therefore, adds another layer of complexity, advocating purely for shareholder value maximization, which may or may not align perfectly with the strategic interests of other major corporate shareholders.

The implications for Kadokawa’s broader portfolio, which includes extensive manga, anime, and publishing divisions, are also significant. If Natsuno is forced to implement a more aggressive IP monetization strategy for Elden Ring, similar pressure could be applied to other valuable assets within the Kadokawa empire, potentially reshaping how the company manages its entire stable of intellectual property.

The Road Ahead for Takeshi Natsuno and Kadokawa

Takeshi Natsuno’s retention of the CEO position is a victory, but it is a victory tempered by the stark reality of weakened shareholder trust. Operating with only 59.68% support, his mandate is significantly diminished, and he will face unprecedented scrutiny from within and without the company. The commitment to review management structure, executive compensation, and the medium-term business plan is not merely a formality; it is a necessity to appease a powerful and persistent activist investor.

The challenge for Natsuno and Kadokawa will be to navigate these demands without compromising the creative integrity that has made FromSoftware’s games, and Elden Ring in particular, so successful. Pushing for excessive commercialization could risk alienating the development team or diluting the quality of future products, which would ultimately harm the IP’s long-term value. Striking the right balance between artistic vision and aggressive monetization will be crucial.

Potential strategic shifts for Kadokawa could include:

• Accelerated IP Expansion: A more robust and diverse pipeline of Elden Ring related content, beyond just sequels and DLC, potentially including more spin-off games, mobile titles, or even animated series.
• Enhanced Global Marketing and Distribution: A more aggressive push into international markets for all Kadokawa IPs, leveraging its various divisions.
• Merchandising and Licensing Overhaul: A more comprehensive strategy for Elden Ring merchandise, potentially partnering with global brands to maximize reach and revenue.
• Clearer Communication with Investors: A more proactive and transparent approach to communicating strategic decisions and financial performance, aiming to rebuild trust and align expectations.

The ongoing presence of Oasis Management as the largest shareholder ensures that the pressure will not abate. Natsuno’s ability to demonstrate tangible progress on his commitments and deliver enhanced shareholder value will define his legacy and determine the stability of his leadership in the years to come. The era of passive Japanese corporate governance appears to be firmly in the past, and Kadokawa’s future will be shaped by an increasingly demanding and globally-minded investor base.