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Sony Eyes $1.3B Manga App, Rivals Blackstone, KKR

Sony to Compete with Blackstone, KKR in $1.3 Billion Bid for Manga App, Aiming to Boost Digital Content Portfolio

By Alex P. Chase

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5/9, 06:33 EDT
Blackstone Inc.
Alphabet Inc.
KKR & Co. Inc.
Sony Group Corporation
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Key Takeaway

  • Sony Music Entertainment is set to bid against Blackstone and KKR for Infocom Corp., valued at $1.3 billion, to expand its digital content portfolio.
  • The acquisition targets the booming digital manga market, with Infocom's Mecha Comics app positioned in a competitive landscape alongside Line and Kakao.
  • Despite facing a 40% decline in smartphone sales in Japan, Sony remains committed to enhancing its entertainment and technology ecosystem.

Sony Eyes Infocom Acquisition

Sony Music Entertainment is actively preparing to enter a bidding war against notable private equity entities, Blackstone Inc. and KKR & Co., for the acquisition of Infocom Corp., a prominent Japanese e-comics provider. The deal, which is speculated to be in the ballpark of ¥200 billion ($1.3 billion), marks a significant move in the digital content space. Infocom, known for its Mecha Comics manga app, is currently majority-owned by Teijin Ltd., holding a 55.1% stake. The upcoming bidding in May for Teijin's entire stake in Infocom has attracted attention due to the potential of taking the e-comics operator private, in collaboration with Japanese fund Integral Corp.

The digital manga market, where annual sales have soared to ¥483 billion, doubling that of traditional paper manga, presents a lucrative opportunity for Sony. This move aligns with Sony's broader strategy to enhance its digital content portfolio, which already includes Aniplex, the producer of "Demon Slayer," and a stake in Crunchyroll, alongside its music operations.

Competitive Landscape and Strategic Moves

The e-comics sector is witnessing rapid growth within the smartphone ecosystem, making it a highly competitive field. Infocom's Mecha Comics, despite its success, faces stiff competition from manga apps operated by Line Corp., Kakao Corp., and Nippon Telegraph & Telephone Corp. This acquisition could significantly bolster Sony's position in the digital content and entertainment sector, leveraging its existing assets in anime and music.

Teijin's decision to divest its stake in Infocom as part of its strategy to focus on core operations and long-term growth adds another layer to the narrative. The sale comes at a time when Teijin has experienced a 52-week low in February, highlighting the challenges and strategic shifts within the company.

Sony's Broader Market Challenges

In a broader context, Sony Group Corp. faces its own set of challenges, particularly in the smartphone market. Despite a strong brand heritage, Sony's mobile sales in Japan have declined by 40% in 2023, with expectations of a similar downturn in 2024. This decline is attributed to the increasing market penetration by competitors, notably Alphabet Inc.’s Google, which has made significant inroads with its Pixel smartphones.

Sony's commitment to the smartphone business, despite declining sales, underscores its strategic importance to the conglomerate's broader ecosystem. The company emphasizes the role of mobile communications in connecting creators and customers, highlighting the synergy between its entertainment and technology segments.