HONG KONG--(BUSINESS WIRE)--Oasis Management Company Ltd. (TOKYO: 9468):<\/p>
\nQ1. Who is Oasis, and how long has Oasis been engaged with KADOKAWA?<\/i><\/strong><\/p> \nOasis Management Company Ltd. (\u201cOasis\u201d) is a long-term, research-driven investment manager whose funds have been shareholders of KADOKAWA CORPORATION (\u201cKADOKAWA\u201d or the \u201cCompany\u201d) since 2020 and currently own approximately 13.76% of the Company\u2019s shares.<\/p> \nOver the past six years, Oasis has engaged extensively with KADOKAWA\u2019s management and Board through meetings, IR discussions, and formal letters. Throughout this engagement, Oasis has advocated consistently for better utilization of KADOKAWA\u2019s world-class IP portfolio, stronger cost discipline, improved capital allocation, and more robust governance.<\/p> \nQ2. What is Oasis\u2019s investment thesis on KADOKAWA?<\/i><\/strong><\/p> \nOasis\u2019s core investment thesis has remained consistent since 2020: KADOKAWA owns exceptional IP assets that remain significantly underutilized, and the value of those assets has not been fully maximized for the benefit of KADOKAWA\u2019s stakeholders.<\/p> \nAlthough KADOKAWA\u2019s shares may appear expensive based on currently depressed earnings, Oasis believes that the Company has the potential to generate substantially higher profitability. With improved gaming economics, a sharper focus in Publication and IP Creation, stronger cost discipline, and a serious review of loss-making operations, Oasis believes that KADOKAWA\u2019s intrinsic value remains meaningfully above what the current share price implies.<\/p> \nQ3. Why did Oasis launch this campaign now?<\/i><\/strong><\/p> \nPerformance under CEO Takeshi Natsuno, who has led KADOKAWA since June 2021, has materially deteriorated despite favorable global tailwinds for Japanese content. During his five-year tenure:<\/p> \nBeyond the poor financial results, the Company failed in its strategic direction with a misguided \u201cquantity over quality\u201d strategy that eroded the core Publication and IP Creation business, while value continues to leak from KADOKAWA\u2019s most important asset, FromSoftware. Shortly before the 2026 AGM, CEO Natsuno abandoned KADOKAWA\u2019s five-year mid-term plan a year early in light of the Company\u2019s inability to achieve the planned targets. The new plan presented by KADOKAWA not only lowers targets from the previous plan but also defers meaningful financial targets to FY32\/3.<\/p> \nAfter five years of accumulated underperformance, Oasis believes the time has come to stop the decline and call for CEO Natsuno to take responsibility for KADOKAWA\u2019s failures and step down as CEO. Notably, CEO Natsuno himself stated in February 2023 that if business expansion failed to deliver results, his resignation would \u201ccome into view.\u201d By his own standard, that moment is now.<\/p> \nQ4. What exactly is Oasis asking shareholders to do at the June 24 AGM?<\/i><\/strong><\/p> \nOasis is asking fellow shareholders to take two actions:<\/p> \nThese votes are complementary. Voting for dismissal clearly expresses shareholders\u2019 dissatisfaction with current leadership, while voting against reappointment ensures that shareholders do not grant CEO Natsuno another term. Oasis believes that both actions are necessary to deliver genuine leadership change and create a better KADOKAWA.<\/p> \nQ5. Why is Oasis focused specifically on CEO Natsuno?<\/i><\/strong><\/p> \nAs KADOKAWA\u2019s top executive over the past five years, CEO Natsuno bears responsibility for the Company\u2019s strategic direction, execution, and financial performance during that period. Oasis believes leadership accountability is essential to restoring confidence among shareholders, employees, creators, business partners, and other stakeholders.<\/p> \nThis does not mean that CEO Natsuno is the only issue. KADOKAWA also requires broader improvements in governance, capital allocation, cost discipline, and Board oversight. However, accountability must begin with the individual who has led the Company through this period of deteriorating performance.<\/p> \nQ6. What are Oasis\u2019s concerns about FromSoftware?<\/i><\/strong><\/p> \nFromSoftware is KADOKAWA\u2019s crown-jewel asset: a globally recognized studio with a loyal international fanbase and a proven ability to create blockbuster titles such as ELDEN RING. Yet KADOKAWA continues to leave a meaningful share of the economics from these titles with third-party publishing partners, creating a significant and ongoing loss of value for all of KADOKAWA\u2019s stakeholders.<\/p> \nOasis has long advocated with KADOKAWA privately and directly for a more ambitious approach to capturing the full value of FromSoftware\u2019s success. 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.<\/p> \nOasis 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.<\/p> \nQ7. Is Oasis trying to force a sale of FromSoftware?<\/i><\/strong><\/p> \nNo, Oasis is not demanding a sale of FromSoftware. We believe that FromSoftware is KADOKAWA\u2019s crown jewel and should be a central driver of KADOKAWA\u2019s long-term growth.<\/p> \nOur point is that FromSoftware must be managed with the ambition, investment, and strategic focus that an asset of its quality deserves. Its employees, creators, and fans deserve ownership and leadership that are fully committed to helping the studio realize its extraordinary global potential.<\/p> \nIf the current ownership and management structure cannot deliver that outcome, then the Board has a responsibility to objectively evaluate what structure best serves FromSoftware, KADOKAWA, shareholders, employees, creators, fans, and all other stakeholders. But Oasis\u2019s primary objective is not a sale \u2013 rather, it is better stewardship of an irreplaceable asset.<\/p> \nQ8. What are Oasis\u2019s concerns about the Publication business?<\/i><\/strong><\/p> \nThe core problem in Publication and IP Creation has been a volume-driven \u201cquantity over quality\u201d strategy under CEO Natsuno. This approach has diluted management attention, weakened per-title economics, and undermined productivity. Belatedly, KADOKAWA has finally recognized its mistake and is looking to address the issues, but it is five years too late.<\/p> \nThe path forward should be clear. KADOKAWA should narrow its publishing slate, broaden its genre exposure, invest more deeply behind titles with genuine scalable potential, strengthen author and creator development, and accelerate digital and international distribution. Importantly, management must establish clear and measurable KPIs so shareholders can evaluate whether real progress is being made.<\/p> \nQ9. KADOKAWA has just announced a new Mid-Term Management Plan. Isn\u2019t that sufficient?<\/i><\/strong><\/p> \nNo. We acknowledge that some elements of the new plan appear to recognize problems that Oasis has identified and on which we have been engaging with the Company, including the need for volume control and profitability improvement. But belated recognition is not the same as accountability or execution.<\/p> \nCEO Natsuno, who presided over these last five years of value deterioration and failure to achieve the last medium-term plan, is now asking shareholders to trust him for another six years. However, many of the proposed measures in the plan are vague, with insufficient disclosure of concrete decision-making criteria, investment hurdles, accountability mechanisms or credible incentives.<\/p> \nShareholders should not accept another promise of future reform from the same leadership that has a demonstrated track record of failing in both strategic thinking and execution.<\/p> \nQ10. KADOKAWA explains that if CEO Natsuno is dismissed now, the continuity of the corporate reforms and management stability would be harmed. Is this true?<\/i><\/strong><\/p> \nNo. Oasis believes the risk of disruption is limited and manageable. KADOKAWA\u2019s day-to-day operations are carried out by talented employees across its business units, and those individuals would remain in place. In addition, the Company is already in a period of strategic transition, having just abandoned its prior MTP and announced a new one.<\/p> \nThe greater risk is not leadership change. The greater risk is continuing with the same leadership that oversaw the Company\u2019s deterioration and is now asking shareholders for another six years. Over the medium and long term, the benefits of capable, focused, and accountable leadership should far outweigh any short-term transition costs.<\/p> \nCEO Natsuno\u2019s poor performance over the last five years and failure to execute on the last medium-term plan do not deserve an opportunity to lead KADOKAWA for another six years.<\/p> \nQ11. If CEO Natsuno is dismissed, what will happen next?<\/i><\/strong><\/p> \nIf CEO Natsuno is not reappointed, the Board should appoint appropriate interim leadership, and the Nomination Committee should promptly begin a formal global search to identify a CEO with expertise in nurturing, globalizing and monetizing IP.<\/p> \nOasis has worked with leading independent executive search firms and is prepared to introduce high-quality candidates to the Board. However, the final appointment decision rests entirely with KADOKAWA and its directors through the formal nomination process.<\/p> \nQ12. What kind of leadership does KADOKAWA need?<\/i><\/strong><\/p> \nKADOKAWA\u2019s next CEO should have a proven track record in global IP monetization, operational discipline, sound capital allocation, and strong governance.<\/p> \nKADOKAWA is not simply a domestic publishing company or a technology company. It is a global IP company with valuable assets across publishing, anime, games, merchandising, and digital platforms. The next leader must understand how to develop IP, invest behind it, scale it globally, and capture more value across the entire chain.<\/p> \nAbove all, the next CEO must be fully committed to KADOKAWA, capable of restoring trust with creators, employees, business partners, and shareholders, and willing to set measurable targets with genuine accountability.<\/p> \nQ13. How would a leadership change benefit KADOKAWA\u2019s broader stakeholders?<\/i><\/strong><\/p> \nKADOKAWA has extraordinary IP and exceptional people. The problem is not the quality of the assets; it is how those assets have been managed.<\/p> \nWith the right leadership, KADOKAWA\u2019s IP can become more widely loved and commercially successful around the world. This would create meaningful and lasting benefits not only for shareholders, but also for creators, editors, employees, business partners, fans, and the broader Japanese content industry.<\/p> \nA leadership change is therefore not just about financial performance. It is about giving KADOKAWA the focused, accountable, and globally capable management it needs to realize its full potential.<\/p> \nFor more information, please visit www.abetterkadokawa.com<\/a> or contact Oasis at info@abetterkadokawa.com<\/a>.<\/p> \nOasis is not in any way soliciting or requesting shareholders to jointly exercise their voting rights together with Oasis. Shareholders that have an agreement to jointly exercise their voting rights are regarded as \u201cJoint Holders\u201d under the Japanese large shareholding disclosure rules, and they must file a notification of their aggregate share ownership with the relevant Japanese authority for public disclosure. Oasis disclaims any intention to be treated as a Joint Holder and\/or a Specially Related Person with any other shareholder under the Japanese Financial Instruments and Exchange Act (\u201cFIEA\u201d) by virtue of the expression of views and opinions and\/or any engagement with shareholders and other third parties in or through this document, any public statements or any other information or materials created and\/or published by Oasis (whether written or oral, and regardless of medium). Oasis has no intention to receive any power to represent other shareholders in relation to the exercise of their voting rights. This document exclusively represents the opinions, interpretations, and estimates of Oasis. Oasis is expressing such opinions solely in its capacity as an investment advisor to the Oasis funds. Oasis and\/or the investment funds it advises hold, and may in the future hold, investments in the company referenced in this document. Accordingly, the views and opinions expressed in this document should not be regarded as impartial. Nothing in this document should be taken as any indication of Oasis\u2019s current or future trading, voting or other intentions which may change at any time. Nothing stated herein is intended to be or should be construed as a proposal for the purposes of paragraph 1 of Article 14-8-2 of the Order for Enforcement of the FIEA (Cabinet Order No 321 of 1965), as amended by Cabinet Order No 247 of 4 July 2025 or otherwise, unless otherwise expressly indicated. The Document exclusively represents the opinions, interpretations, and estimates of Oasis.<\/p>\n
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