Tencent, 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, publisher in Japan of hit action role-playing title “Elden Ring”, via a third-party allotment of new shares, FromSoftware parent Kadokawa Corp (9468.T) said on 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 hold 16.25% and 14.09%, respectively, with publishing giant Kadokawa retaining 69.66 %.

The multi-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” author George RR Martin. It had sold 16.6 million units worldwide by the end of June.

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The transaction is the latest investment in Japan by Chinese gaming giant Tencent and extends spending by entertainment conglomerate Sony as that company looks to shore up its leading industry position in the face of deep-pocketed rivals. Tencent and Sony already have stakes in Kadokawa itself.

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

The deal could lead to preferential treatment for Sony’s platform over such rivals as MicrosoftCorp’s (MSFT.O) Xbox with future FromSoftware titles, although they were 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

Our Standards: The Thomson Reuters Trust Principles.

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