The company KADOKAWA published the November 6 its financial report for the second quarter of the fiscal year ending in March 2026. The results show a decrease in income and profitswith net sales of 1,339.3 billion yen (1.8% less than the previous year) and a 47.8% drop in operating profits, which were at 55.5 billion yen.
The division of anime and live-action productions was the most affected, with a drop in 20.4% in sales (210.3 billion yen) and a operating loss of 8.95 billion yencontrasting with the 36.4 billion yen in profits registered in the same period of the previous year. According to the report, the main cause was that the proportion of first anime adaptations was higher than that of sequels to established franchises, which reduced the average revenue per title.
Doga Kobo impact and new strategies
Furthermore, KADOKAWA noted that the loss was aggravated by the amortization of 2.7 billion yen derived from the integration of Doga Kobo as a consolidated subsidiary. The study, acquired in the previous period, generated an extraordinary expense that directly affected the results of the first half of the fiscal year.
In contrast, the area of video games reported solid results thanks to the international success of ELDEN RING: NIGHTREIGNreleased in May 2025. However, the publishing segment experienced lower profitability due to the rise of smaller-scale titles and higher production costs.
Recovery expected with great titles
For the winter quarter, KADOKAWA plans recover ground with the premiere of popular franchises such as *Oshi no Ko* (third season) and *Medalist* (second season). In the fall quarter, the company was involved in the production of titles such as *Watashi wo Tabeta Hito de Nashi*, *Chitose-kun wa Ramune Bin no Naka* and *Isekai Quartet*.
Regarding its division of live-actionKADOKAWA highlighted the contribution of films such as *Yamada-kun to Lv999 no Koi wo Suru* and *Mieruko-chan*although income from secondary distribution rights was lower than the previous year.
With a calendar full of high-profile sequels for early 2026, the company is confident that its strongest franchises will allow it to reverse the negative trend. Will *Oshi no Ko* and *Medalist* be able to rescue KADOKAWA's numbers in the new year?
