Kadokawa Fortifies Animation Production with Doga Kobo Acquisition

Media conglomerate Kadokawa announced its acquisition of Doga Kobo, the esteemed animation studio behind the hit anime "Oshi no Ko." While the specifics of the share acquisition and financial details remain undisclosed, this move signals a strategic expansion for Kadokawa in the animation industry.

Doga Kobo: A Legacy of Excellence
Founded in 1973, Doga Kobo has built a robust reputation over its 50-year history. Despite its mid-sized status with 62 employees, the studio has made significant contributions to the animation landscape. Doga Kobo shifted towards primary production in the late 2000s, crafting well-known series such as Yuru Yuri (YuruYuri: Happy Go Lily), Gekkan Shoujo Nozaki-kun (Monthly Girls' Nozaki-kun), and New Game!. Renowned for its meticulous animation quality, Doga Kobo enjoys a loyal fanbase and high industry esteem.

Kadokawa's Strategic Vision
The acquisition of Doga Kobo aligns with Kadokawa's global entertainment expansion strategy, with a focus on anime production as a pivotal component. Historically, Kadokawa played a major role in anime production through partnerships but has intensified its direct involvement. Initiatives like the establishment of ENGI through joint investment in 2018, investment in Kinema Citrus in 2019, and the creation of Studio KADAN in 2021 paved the way for its expanded presence. In 2024, Kadokawa further solidified its position with the launch of Raging Bull and Bellnox Films.

With Doga Kobo joining its ranks, Kadokawa now commands six animation studios, significantly bolstering its production capabilities. This strategic move is timely amidst industry talent shortages and intensifying competition, positioning Kadokawa for a stronger foothold in the market.

Kadokawa's Growth Targets and Strategic Initiatives
Looking ahead, Kadokawa aims to achieve sales of 340 billion yen (approx. US$2.13 billion) by the fiscal year ending March 2028, marking a 35% increase from fiscal year March 2024, as outlined in its midterm management plan. Central to this strategy is the scaling up of anime production to 20 titles annually, quadrupling its current output and leveraging its expanded studio portfolio.

Industry Trends and Competitive Landscape
Kadokawa's acquisition of Doga Kobo reflects broader industry trends, where major companies are acquiring animation studios to secure production capabilities. In 2024, this trend continued with significant acquisitions such as Bandai Namco Filmworks' acquisition of 8bit and TOHO's acquisition of Science SARU.

A key factor in these acquisitions is the production of major hit works by the studios, with the acquiring companies often having invested in these productions. Historically, anime production and distribution were typically separated by capital. However, there is now a growing trend towards integrating planning, production, and distribution.

According to the Association of Japanese Animations (AJA), the Japanese anime market, including overseas demand, reached 2.92 trillion yen (approx. US$18.31 billion) in 2022, marking a 7% increase from the previous year. Despite this growth, there remains a shortage of creators, prompting Kadokawa to strategically enhance its production capacity through acquisitions. Integration within a major corporate structure is expected to improve working conditions and elevate production quality, meeting the rising global demand for anime content.

Source: PR Times, Animation Business Journal, Nikkei