Japanese giant Kadokawa is facing a turbulent financial scenario after the release of its latest report . The company's profits plummeted by about 60% between April and December 2025. The bet on new stories, instead of continuations of established anime, generated this operating loss.
While overall sales held up, the anime and live-action recorded significant losses. Producing new works requires high investment and offers uncertain returns. Furthermore, increased production costs and salaries strained the budget. Without the support of major manga releases or significant sequels, revenue from licensing and merchandise cooled.
gaming side , the company secured an extra boost for the group. The success of titles like Elden Ring Nightreign prevented an even greater disaster. However, the domestic publishing market in Japan remains stagnant. Now, Kadokawa is placing its hopes on hits like Oshi no Ko and Re:Zero to recover its financial footing by March 2026. After all, the industry proves that innovation is essential, but sequels guarantee cash flow stability.
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