Japanese manga, anime, and game publisher Kadokawa recently revealed its consolidated financial results for the fiscal year ending March 2026. The report indicates a significant 51.3% drop in operating profit compared to the prior year, largely attributed to underwhelming performance in its core publishing and intellectual property creation division, which saw a 51.6% year-on-year decrease in operating profits.
In its newly published mid-term management strategy covering the period from FY 2026 to FY 2031, Kadokawa points to “over-reliance on established success formulas” as a key driver behind the publishing sector’s profit decline.
The company has acknowledged a recent trend favoring “tried-and-true genres,” including isekai and narou-kei, which has inevitably led to market saturation and deteriorating profitability. According to Kadokawa, the formulaic approach and noticeable lack of content diversity have hindered its domestic publishing arm from venturing into new genres or undertaking innovative projects.
Although Kadokawa has been taking steps and hiring additional editors to boost the volume of published works without overburdening staff, this initiative has also had adverse effects on its business, resulting in an “uptick in titles lacking originality or quality.”
To address these challenges, the company plans to revamp its “genre strategy” and enforce stricter standards for approving projects. Moreover, significant emphasis has been placed on restructuring the publication business, with the Publication Steering Committee, established in November 2025, tasked with implementing “fundamental structural reforms.”
Separately, as part of its drive to “establish a leaner and more efficient organizational framework,” Kadokawa has also announced an early retirement scheme for its staff. Starting June 1, the company will invite voluntary resignations from employees aged 45 or older with at least five years of service. Those who opt for retirement will receive an enhanced severance package alongside standard severance pay, along with optional re-employment assistance.
Mido