Kadokawa Corporation (hereinafter will be referred to as “the group”) reported its best second quarter performance to date (since FY2016) with quarter sales at a high 122,639 million yen (≈829.55 million USD), up by as much as 17.01% year-on-year (y-o-y) while its quarterly profit jumped 48.07% to 10,537 million yen (≈71.16 million USD). According to the group, the strong performance it noted from April 1 to September 30, 2022 (will also be referred to as “half-year” from time to time in this article), was attributable to a number of reasons, one being Elden Ring that continued to be a driver of sales. Another being the number of animation projects that the group noted is steadily approaching the 40 titles mark per year mark, allowing the group to achieve steady growth. Finally, sales from its Publication Business remained solid thanks to robust overseas businesses, in addition, it saw sales of e-books becoming increasingly important within the segment.
Kadokawa Corporation defines the segment as a business that sells digital and paper-based books and magazines. At the same time, it also produces magazine advertisements and engages in the selling of digital ads and licenses.
Sales for the segment reported a small increase of 1.57% to 66,142 million yen (≈447.48 million USD) amid positive demand from overseas markets, particularly North America. The domestic market, however, is said to be shrinking y-o-y. Although the group has pushed up the number of titles in the second quarter from 940 (first quarter) to 1,169, that did not offset the negative growth it experienced in the first quarter (sales were reported to be down by 0.55% for that period) which was partly caused by a reactionary decline of rights licensing of popular titles. Sales that the group generated from paper-based books have also fallen by 1.6% with Manga being the biggest contributor to sales at 34% followed by general books and pocket editions at 22%, Light Novels at 15%, books at 11%, children books at 9% and magazines at 8%. E-book sales on the other hand have improved by 7.3%, encompassing 38% of the Publishing Business, meaning, it made 25,134 million yen (≈170.40 million USD) in sales as of the second quarter. According to the group, sales of e-books or magazines for the second quarter alone (between July 1 and September 30 not the half-year) was 12,612 million yen (≈85.75 million USD). To add on, the group indicated that otherworldly comics (or isekai) among others was one of the reasons for the strong sales of its e-book business. Domestically, sales from titles such as: Dungeon Meshi Volume 12, Daija ni Totsuida Musume Volume 2 were on a positive note.
Dungeon Meshi Volume 12
Daija ni Totsuida Musume Volume 2
With all that said though, the group’s quarterly profit for the segment did not record a rise, instead it fell by nearly 40% y-o-y to 5,732 million yen (≈38.88 million USD) with the group attributing the cause of the decline to its investment in in vertical scrolling comics and human resources, plus the increasing cost of logistics overseas etc. Note that for the quarter alone (July 1 to September 30), its segment profit stood at 3,160 million yen (≈21.48 million USD), up from first quarter’s 2,571 million yen (≈17.48 million USD).
There have been some movements as to the group’s best performing publishing titles throughout the half-year. Sword Art Online retains its Number 1 spot being the group’s best earner with Overlord climbing a spot up to Number 2. Re:Zero kara Hajimeru Isekai Seikatsu and Mahouka Koukou no Rettousei are unchanged in their Number 4 and 5 positions while Isekai Meikyuu de Harem wo dropped one place to Number 7. Three new titles that were not present in the first quarter result have made their appearances here. Fate, Love Live! and Daija ni Totsuida Musume take up the bottom three places respectively.
In total, the Top 10 best performing titles you see here are worth 7% of all the sale from the segment, which is 4,630 million yen (≈31.50 million USD) whereas the rest, not in the Top 10, were at 61,512 million yen (≈418.32 million USD). Below is the full Top 10 list for the best performing titles in the publishing segment:
|Rank||Δ||Title Name (Series)||Year It was First Published||Video||Game|
|1||→||Sword Art Online||2009||〇||〇|
|3||↓1||KADOKAWA Manga Gakushu Series||2015||–||–|
|4||→||Re:Zero kara Hajimeru Isekai Seikatsu||2014||〇||〇|
|5||→||Mahouka Koukou no Rettousei||2011||〇||–|
|7||↓1||Isekai Meikyuu de Harem wo||2017||〇||–|
|10||NEW||Daija ni Totsuida Musume||2021||–||–|
Did Kage no Jitsuryokusha ni Naritakute! Really Sell 2 Million Copies?
If you head over to its presentation material page 14, the group noted there that Kage no Jitsuryokusha ni Naritakute! (also known as The Eminence in Shadow in English) have sold 2 million copies which is not the case at all. Upon checking the Japanese presentation material (page and 14) its Twitter account, the most accurate term we should have seen here is “in print” which is often written in Japanese as “累計… 万部突破” or literally “reached … ten thousand copies cumulatively”. Note that this is also confirmed by Kadokawa Corporation that the group does not “disclose sales results and forecast for individual titles” on its FAQ page on page 30 of the presentation material.
Kage no Jitsuryokusha ni Naritakute! supposedly to have sold 2 million copies,
the number should have been total “in print” instead
Kadokawa Corporation of not disclosing sales results of individual titles on page 30
Video and Game Businesses
Kodokawa Corporation defines its Video Business as a business that plans, produces and distributes live-action films and anime. It also handles the distribution of licensing rights here and the sales of package software. As for its Game Business, the segment involves planning, development, sales and licensing of game software and internet games.
For the Video Business, the group reported an increase in sales y-o-y by 16.67% to 18,953 million yen (≈122.78 million USD) which was mainly due to the increase in the number of new titles: Overlord IV and Tate no Yuusha no Nariagari and others for both domestic and international markets. Streaming revenue was reportedly to be strong and had resulted in the overall increase in sales for the segment.
Due to the devaluation of some live-action titles, the segment actually recorded a heavy drop in profit by 94.16% y-o-y to only 60 million yen (≈407.28 thousand USD). The “one-off writedowns” as the company noted in its quarterly report, had resulted in a loss of 619 million yen (≈4.20 million USD) for the quarter alone (from July 1 to September 30).
The group’s Top 10 performing titles have experienced some changes with Overlord being the best earner for the half-year, climbing 5 spots up and overtaking Kakkou no Iinazuke that has dropped two places to Number 3. Re:Zero kara Hajimeru Isekai Seikatsu remains steadfast at Number 2 while Tate no Yuusha no Nariagari retreated by a spot to Number 4. Other titles that made it onto the first quarter list are still present here: Kono Subarashii Sekai ni Shukufuku wo! fell by one place to Number 9 while Yuusha, Yamemasu stumbled by 6 spots to Number 10. Four new titles can be found on the list are Isekai Ojisan, Made in Abyss, Youkoso Jitsuryoku Shijou Shugi no Kyoushitsu e and Isekai Yakkyoku, all taking up Numbers 5 to 8.
The Top 10 titles alone saw sales worth up to 6,634 million yen (≈45.02 million USD) accounting to 35% of the total sales for the Video Business while others were at 12,319 million yen (≈83.63 million USD). Below are the full Top 10 list:
|Rank||Δ||Title Name (Series)||Year It was First Published||Video||Game|
|2||→||Re:Zero kara Hajimeru Isekai Seikatsu||2016||〇||〇|
|3||↓2||Kakkou no Iinazuke||2022||–||–|
|4||↓1||Tate no Yuusha no Nariagari||2019||〇||〇|
|6||NEW||Made in Abyss||2017||〇||〇|
|7||NEW||Youkoso Jitsuryoku Shijou Shugi no Kyoushitsu e||2017||〇||–|
|9||↓1||Kono Subarashii Sekai ni Shukufuku wo!||2016||〇||〇|
As for its Game Business, the performance here is just remarkable. Sales have catapulted by 255.10 y-o-y to 17,137 million yen (≈116.43 million USD) largely driven by Elden Ring. The increase in sales were also a result of other collaboration or contracted works related to new titles with Spike Chunsoft Co., Ltd. (a wholly owned subsidiary) and others. Its segment profit gets even better, jumping by a whopping 1118.62% to 7,592 million yen (≈51.72 million USD) from just 623 million yen (≈4.25 million USD) recorded the fiscal year before, also thanks to Elden Ring, though largely due to its overseas shipment.
Note. The Video and Game Business are reported together here as Kadokawa Corporation used to group them together, but separated the segments into two parts from FY2021 onward. I will split the two once we hit FY2025.
The Rest of the Segments
As for the rest, its Web Services Business saw a minor increase in sales by 5.3% to 11,548 million yen (≈78.66 million USD), but segment profit has dropped 24.7% y-o-y to 942 million yen (≈6.42 million USD). Education Business has risen by 12% for its net sales to 6,265 million yen (≈42.68 million USD) with a segment profit of 1,316 million yen (≈8.97 million USD). Others saw sales amounting to 7,565 million yen (≈51.54 million USD) and a segment loss of 1,788 million yen (≈12.19 million USD).
Refer to chart for each segment share.
Movements Within the Group
There are a couple of things to note of that happened throughout the half-year. The first being Kadokawa Corporation acquisition of ANIME NEWS NETWORK Inc., which was announced on November 1 this year in a bid to strengthen marketing of Japanese animations, Manga and Light Novels in English-speaking countries. And then, there is the acquisition (annonced on August 31 this year) of quite the significant amount of shares of FromSoftware, Inc. (the company that developed Elden Ring) by Sixjoy Hong Kong Limited, a subsidiary of Tencent Holdings Limited and Sony Interactive Entertainment Inc., a subsidiary of Sony Group Corporation. As a result, Kadokawa Corporation holding of the company has dropped from 100% to 69.66% while Sixjoy Hong Kong Limited and Sony Interactive Entertainment Inc. own it by 16.25% and 14.09% respectively.
Kadokawa Corporation announcing the acquisition of ANIME NEWS NETWORK Inc., on page 13 of the presentation material
Tencent and Sony Interactive Entertainment involvements in FromSoftware, Inc. after acquisition
of some of its shares as illustrated by Kadokawa Corporation on page 16
On November 2, 2022 (the day the 2nd quarter result was announced), Kadokawa Corporation’s stock price closed at 2,735 yen (≈19 USD) per unit, up by 1.86% from 2,685 yen (≈18 USD) the day before with a total of 554,200 volumes traded.
Kadokawa Corporation is incorporated in Japan with its headquarter located in Tokyo. The company owns several well-know entities including: BOOK WALKER, FromSoftware, Spike Chunsoft and YEN PRESS. It is publicly listed on the Tokyo Stock Exchange under the ticket symbol 9468.
All currency conversion was done at the time of writing.
Consolidated financial results for the six months ended September 30, 2022
Financial Results for the Second Quarter Ended September 30, 2022
Sales and Profit / Loss (Group)
Sales and Profit / Loss (Publishing)
Pie Chart (Publishing)
Sales and Profit / Loss (Video and Game)
Pie Chart (Video)
Consider following my blog by clicking on the button below: Follow Erzat on WordPress.com