Elden Ring 'profit leakage' has Kadokawa investors looking for a new boss

You remember Elden Ring, right? Pretty good game, pretty successful, won a few awards? Well, forget about all that: A Reuters report says a substantial number of shareholders in Kadokawa Corporation, the parent company of Elden Ring developer FromSoftware, want to give CEO Takeshi Natsuno the boot because, simply put, he's blowing it with Elden Ring.

Natsuno appeared to be in a strong position atop the company, earning the support of 90% of the company's shareholders at Kadokawa's 2025 annual general meeting. But Oasis Management, described in the report as "one of the most active activist investors in Japan," is now Kadokawa's largest single shareholder, with nearly 14% of the company, and it wants Natsuno gone.

The problem, ironically, is Elden Ring's success. I may have (also ironically) undersold it just a bit up above: Elden Ring had sold more than 30 million copies as of April 2025, three years after its release, and the Shadow of the Erdtree punched out 10 million more. Add another five million copies of the multiplayer Elden Ring Nightreign on top of that, and you've got yourself some enviable numbers by any measure. But as Janet Jackson once famously asked, what have you done for me lately?

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The problem is "profit leakage," essentially meaning that Kadokawa under Natsuno's leadership has failed to capitalize on Elden Ring's success to make more money—in particular, it's let money slip through its fingers by partnering with external publishers for game releases. Elden Ring, for instance, is published by Kadokawa (via FromSoftware) in Japan, but Bandai Namco is the global publisher.

In a press release calling for Natsuno's ouster earlier this month, Oasis described FromSoftware as a "crown jewel asset," but said Kadokawa "continues to leave a meaningful share of the economics from [its] titles with third-party publishing partners, creating a significant and ongoing loss of value for all of Kadokawa stakeholders."

"Oasis has long advocated with Kadokawa privately and directly for a more ambitious approach to capturing the full value of FromSoftware’s success," Oasis wrote. "Management itself previously committed to self-publishing under its prior mid-term plan, and raised money in 2022, diluting shareholders, to self-publish. But CEO Natsuno has since retreated from that commitment without providing shareholders with a clear explanation, economic framework, or decision criteria for how and when Kadokawa will improve gaming economics.

"Oasis is not saying that every title must be self-published immediately. Rather, Oasis is asking for transparency, discipline, and a credible plan for how Kadokawa will capture more value from one of the most important assets in the global gaming industry."

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Beyond Natsuno, Oasis believes "Kadokawa also requires broader improvements in governance, capital allocation, cost discipline, and Board oversight." But he's the top dog, and that's where you start with these things.

Elden Ring isn't Natsuno's only problem: A 2024 data leak cost the company millions, which apparently didn't go over super-well with anyone, and shareholders are also reportedly unhappy that a hoped-for (by investors) acquisition by Sony turned into a relatively small-potatoes "strategic alliance" in which Sony took 10% of the company. It came to light in a new Reuters report that Natsuno did in fact survive the AGM and will maintain his position, but the actual results of the vote won't be known for several days; if his support has dropped off sharply, Natsuno may be forced to implement many of the changes desired by Oasis and other activist investors anyway.
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