KADOKAWA CORPORATION

Business Details

Engages in publishing and sales of print books and magazines, publishing and sales of e-books and digital magazines, sales of Web advertising, and rights licensing, among others. Creates over 6,000 new IP titles annually, and the extensive accumulated archive of works serves as a driving force for Group growth. Serving domestic and overseas readers and licensees as customers, the segment contributes to maximizing LTV across the Group by stably supplying IP that becomes the source of media-mix development. Major subsidiaries include KADOKAWA CORPORATION, DWANGO Co., Ltd., YEN PRESS, LLC, Taiwan Kadokawa Co., Ltd., and Edizioni BD S.r.l.

Recent Overview

Revenue increased but profit fell 51.6% year on year, pressured by declines in e-books and licensing revenue and higher personnel costs

In the Publishing & IP Creation Business for FY2026 (ending March 2026), sales increased to ¥155,634 million (up 2.8% year on year), but segment profit fell sharply to ¥4,054 million (down 51.6% year on year). Declines in profit from domestic print books and e-books were significant, and rising personnel costs also pressured profit. Meanwhile, overseas business grew steadily in the US and Asia, and in May 2025 the company consolidated Italy's Edizioni BD S.r.l. (acquiring a 70% stake, with goodwill of ¥2,328 million), beginning European expansion. The number of new IP titles created increased 9.3% year on year. Impairment loss on fixed assets of ¥371 million was recorded (versus ¥63 million in the prior period).

Key Products

Growth Drivers

• Continued revenue growth in overseas business (US, Asia, Europe): YEN PRESS and Taiwan/Asia subsidiaries remain strong, and consolidation of Edizioni BD (Italy) has begun expansion into the European market. Global expansion of work distribution underpins sales
• Increase in the number of new IP titles created: Over 6,000 new IP titles were created in FY2026 (ending March 2026), up 9.3% year on year, continuously expanding the source of media-mix development
• Transformation toward a more profitable business structure through structural reforms: Organizational reform of the domestic publishing business, reduction of indirect costs through workflow improvements, downsizing/withdrawal from unprofitable businesses, and improving the return rate through manufacturing and logistics reforms
• Promotion of global multilingualization and simultaneous distribution: Investment in multilingual e-books, expansion of overseas distribution of print books, and expansion of the North American "Manga Spot" directly managed store network (currently 10 stores)
• Business alliance with note, inc.: Joint pilot initiatives to promote original work discovery and strengthen sales promotion, and to build a new AI-based data distribution model

Risks

• Structural contraction of domestic print books: The trend of smaller per-title sales continues, and profitability has declined due to compounding increases in material and logistics costs
• Hit-title dependency risk: Both e-book and licensing revenue are highly volatile depending on the presence of hit titles; a shortage of hits became apparent in FY2026 (ending March 2026), leading to a revenue decline
• Rising personnel costs and IP creation investment: Continued investment for medium- to long-term growth is pressuring profit, becoming a factor in the short-term decline in profitability
• Cyber-attack risk: The June 2024 cyber-attack caused a temporary sharp decline in shipment volumes of existing titles; a recurrence would have a significant business impact
• Goodwill amortization and impairment risk: The goodwill balance from M&A increased to ¥3,180 million at the end of FY2026 (ending March 2026) (versus ¥1,386 million at the end of the prior period), creating impairment risk if the performance of acquired companies deteriorates. An impairment loss on fixed assets of ¥371 million was recorded in the current period
• Slowing growth in domestic digital publishing: The pace of growth in domestic digital publishing has moderated compared to before, and revenue declined further due to the fading of the prior-year revenue boost from estimate-based recognition