Tencent and Sony to take stake in ‘Elden Ring’ publisher FromSoftware

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TOKYO, Aug 31 (Reuters) – Units of Tencent and Sony will take minority stakes in FromSoftware Inc, Japan’s publisher of the hit action role-playing game title “Elden Ring”, via a third-party allotment of new shares, the FromSoftware’s parent company, Kadokawa Corp. (9468.T) said Wednesday.

Following the transaction, which will raise 36.4 billion yen ($263 million), units of Tencent Holdings Ltd (0700.HK) and Sony Group Corp (6758.T) will own 16.25% and 14.09%, respectively. %, with publishing giant Kadokawa retaining 69.66. %.

The cross-platform fantasy title, which is published by Bandai Namco (7832.T) outside of Japan, is a collaboration between veteran game director Hidetaka Miyazaki and “Game of Thrones” writer George RR Martin. It had sold 16.6 million units worldwide by the end of June.

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The deal is Chinese gaming giant Tencent’s latest investment in Japan and extends entertainment conglomerate Sony’s spending as the company seeks to solidify its industry leadership position against deep-pocketed rivals. Tencent and Sony already have stakes in Kadokawa itself.

“The investment shows that Tencent is still active in significantly expanding its footprint outside of China,” said Serkan Toto, founder of consultancy Kantan Games, describing FromSoftware as a “business and creative powerhouse.”

The deal could lead to preferential treatment for Sony’s platform over rivals such as MicrosoftCorp’s (MSFT.O) Xbox with future FromSoftware titles, although they are unlikely to become PlayStation exclusives, Toto added.

($1 = 138.4600 yen)

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Reporting by Sam Nussey; Editing by Chang-Ran Kim and Bradley Perrett

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