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KADOKAWA Targets Anime Expansion in Ambitious Medium-Term Plan

Japan
k 9468.TSE Anime 20 Entertainment 100 Games 75 Mid and Small Cap 2000
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KADOKAWA’s recently unveiled 2023 third-quarter financial results underscored the flourishing performance of its anime business. The company is set to place a substantial emphasis on anime as a key driver of future growth. The medium-term management plan, spanning from March 2024 to March 2028, strategically positions anime at the forefront of KADOKAWA’s expansion efforts.

KADOKAWA notes that the demand for anime intellectual property (IP) is experiencing robust growth, driven by the global proliferation of video distribution platforms. This surge in popularity is further extending to ancillary fields such as manga, novels, merchandise, and events, both domestically and internationally. With this in mind, KADOKAWA intends to amplify its presence in this domain and cultivate a global media mix.

In terms of revenue from media mix, securing comprehensive rights to anime works across various domains becomes imperative. This endeavor may require heightened investment in production, potentially signifying a notable increase in KADOKAWA’s anime investment in the future.

A distinctive aspect of KADOKAWA’s strategy lies in its commitment to bolstering anime production. This includes lengthening the duration of individual works, with plans to augment the number of seasons and episodes per title. By extending the lifecycle of works, KADOKAWA aims to methodically advance its licensing endeavors.

Yet, the current scarcity of studios and human resources within the anime industry poses challenges to flexible content creation. In response, KADOKAWA has opted to proactively engage in in-house animation production. The company presently invests in several anime studios, including ENGI, StudioKADAN, and Kinema Citrus, which frequently collaborate with KADOKAWA.

In addition to these efforts, KADOKAWA seeks to expand production capabilities within the group. This involves the establishment of new wholly-owned studios, potential acquisitions through mergers and acquisitions, and further collaborative ventures. While KADOKAWA currently invests in over 40 titles annually, the group itself produces roughly five animations. The objective is to escalate this output to 20 productions per year.

These strategies appear influenced by industry trends observed among rival companies. Major players in the anime sector, such as Bandai Namco Group and Aniplex, exercise substantial control over their works through significant investments in flagship titles within their respective conglomerates. KADOKAWA endeavors to adopt a similar business model.

One of KADOKAWA’s distinctive strengths lies in its extensive publishing ventures, encompassing a diverse range of original works including manga and light novels. By producing content based on its own intellectual property, KADOKAWA envisions a comprehensive anime business model. This synergistic approach is further facilitated by the integration of the company’s publishing and anime licensing departments, alongside the establishment of a dedicated Global Rights Department. This strategic move aims to enhance operational efficiency and bolster profits by unifying operations across various sectors.

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