Company history

Kadokawa Shoten was founded in Tokyo in November 1945, months after the surrender, by Kadokawa Gen’yoshi — a scholar of classical Japanese literature who believed Japanese culture could be rebuilt through publishing. The list was accordingly severe: national history and literature, scholarly monographs, dictionaries, textbooks. In 1949 he added the Kadokawa Bunko, a cheap paperback line carrying the classics and foreign literature to a mass readership, and it grew into a pillar beside the reference books. Kadokawa Tsuguhiko would later call these years the company’s “literary publisher” era.

Gen’yoshi was a publisher and an academic at once, lecturing at Keio and Kokugakuin. Compiling dictionaries and encyclopaedias takes years and capital and can only be attempted by a house that means to stay; the work earned Kadokawa a reputation a 1976 profile summed up as おカタい本屋さん — the stiff, serious bookshop of textbooks and reference works. That credit, accumulated on hard books, was the capital the company would later spend on entertainment.

His second son, Kadokawa Haruki, was the temperamental opposite — boxing and kendo at university, work as a labourer by day and a bartender by night after it, four disownments as a student, and by his own account a man who had “never properly read a book.” Yet around 1967 Gen’yoshi remarked that “a man stops making progress at fifty-five,” kept the president’s title, and handed the running of the business to his twenty-five-year-old son. What he passed over was a loss-making operation to fix and the freedom to remake a serious publisher into something else.

Gen’yoshi died in October 1975 and Haruki formally took the presidency. His first move broke a taboo: colour covers on paperbacks, in an age when a bunko was expected to look as plain as an Iwanami volume. Alongside them came image advertising aimed straight at the young — “there are journeys you take because you want to read” — selling a mood rather than a title. Two devices, and the stiff old house of dictionaries became a publisher that moved readers with paperbacks and entertainment.

The numbers followed. Paperback print runs rose from 25 million copies in 1972 to 45 million in 1975; Kadokawa drew level with the long-dominant Shinchosha in 1974 and passed it 6:4 the following year. By 1976 bunko accounted for roughly 70% of sales, and Haruki could say that turnover had roughly tripled and recurring profit quintupled in five years. The “Yokomizo Seishi comeback fair,” reissuing the mystery writer in paperback, sold 2.5 million copies in two months.

He then carried the boom into film. Partnering with Toho, Kadokawa produced The Inugami Clan and released it in October 1976 to coincide with the Yokomizo fair. The reasoning was plain: foreign titles the company licensed had sold because films sold them, so it would run the same effect on works it owned outright. Film sold the paperback, the paperback sold the film, and the advertising budget was split between the publishing and film sides — a method without precedent in Japanese publishing. What Kadokawa now sold was not a book but a work that could be sold again in changed form, and in 1982 it opened a third front with Weekly The Television, a listings magazine that reached 1.3 million copies a week by the late 1990s and was followed by game, anime and city titles such as Tokyo Walker. The model worked because one outsized personality drove it, which was also why it would not transfer easily.

Kadokawa Tsuguhiko joined the firm out of Waseda in 1966 and rose through editorial to sales director, executive vice-president and vice-president, but his quarrel with his brother over the company’s direction ended in his resignation in 1992. In February 1993 his backers set up a rival publisher, MediaWorks, with Tsuguhiko as president. That same year Haruki was arrested under the narcotics control law and forced out; Tsuguhiko returned as an adviser and became president in October 1993. The younger brother who had left over strategy was called back by the elder’s arrest.

He revived Kadokawa’s film business from 1995 with hits including Lost Paradise and Ring, and by 1999 was describing an ambition to push the “soft mix” — novel into film into game — onward into a “net mix” fused with the internet, the idea that would eventually produce the Dwango merger. He read the company’s past as three successive business models — literary publisher, paperback-and-film media mix, magazines — and declared he would find a fourth. In November 1998 Kadokawa listed on the Second Section of the Tokyo Stock Exchange, the first full-scale publisher to do so, on sales of $602M (¥79bn) for the year to March 1998, up 16.4%.

As the Japanese book market shrank after its 1996 peak, Kadokawa alone prospered: in fiscal 2008 Kodansha and Shogakukan posted operating losses of ¥7.6bn and ¥6.3bn while Kadokawa’s operating profit rose from ¥3.5bn toward ¥5.0bn and it led all three on sales. Paperbacks earned nearly 60% of publishing gross profit and light novels about 60% of that; The Melancholy of Haruhi Suzumiya (2003) reached 5.8 million copies, and president Sato Tatsuo called the pattern of pushing a book out into film, magazines, games and overseas “Kadokawa’s golden formula.” The structure was rebuilt to match — a holding company in 2003, renamed Kadokawa Group Holdings in 2006, ASCII Media Works formed in 2008, Media Factory bought from Recruit in 2011 — and then, in October 2013, nine operating companies were absorbed into one and the group renamed itself KADOKAWA.

On 14 May 2014 Kadokawa announced a merger with the video platform Dwango, and on 1 October the joint holding company KADOKAWA・DWANGO listed on the First Section of the Tokyo Stock Exchange. The ratio was 51 Dwango to 49 Kadokawa even though Kadokawa’s latest revenue of $1.4B (¥151bn) was more than four times Dwango’s $339.2M (¥36bn) — the smaller party placed above the larger. Tsuguhiko wanted a content platform without parallel anywhere; more than that, he wanted Dwango’s chairman Kawakami Nobuo as his successor.

What followed looked less like fusion than friction. In January 2015 KADOKAWA sought about 300 voluntary redundancies, roughly a tenth of its permanent staff, thinning the publishing side first; in October the group renamed itself Kadokawa. The transitional six-month period to March 2015 showed sales of ¥100.6bn and operating profit of ¥1.4bn, with net profit of ¥14.1bn propped up by negative goodwill. The name Kadokawa Shoten, carried since 1945, disappeared from the organisation, and critics predicted the pair would be “divorced or sunk together inside five years.”

Recovery came by pulling the pieces back together: in July 2019 the holding company absorbed its operating subsidiary and took the name KADOKAWA outright, and in August 2020 it opened Tokorozawa Sakura Town outside Tokyo, built around Kuma Kengo’s Kadokawa Culture Museum. The business model settled into vertical integration — generate intellectual property in publishing, then work it through the group’s own anime, games and merchandise. The year to March 2024 produced some 6,000 new IPs against an archive of 130,000; Re:Zero was designed for anime before it was even a book, the games subsidiary FromSoftware’s ELDEN RING became a global hit, and licensing income approached ¥40bn. Sales reached $1.8B (¥255bn) in the year to March 2023 with operating profit of ¥25.9bn, the best since the merger.

Then, on 8 June 2024, a ransomware attack by the Russia-linked group BlackSuit took down Niconico and much of the group’s systems; about 1.5 terabytes of internal data was stolen, including personal information on N High School students and Dwango staff. KADOKAWA booked a ¥3.6bn special loss in the year to March 2025 and net profit fell from ¥11.4bn to ¥7.4bn — this on top of Tsuguhiko’s arrest in September 2022 over bribery in the Tokyo Olympics sponsorship selection and his 226 days in detention. The answer was an alliance: agreed with Sony Group in December 2024, and in January 2025 Sony took roughly 10% of the voting rights for about $334.1M (¥50bn) through a third-party allotment to become the largest shareholder. Early reports of an outright acquisition proved wrong. The business Kadokawa Shoten began by moving a story from paperback to screen continues — with Sony as the partner and the world as the market.