“Over-reliance on ‘Narou’ and ‘Isekai’ Genres”—KADOKAWA Reports Sharp Drop in Publishing Profits, Accelerates Structural Reforms (in Japanese)

Partial Translation by DeepL:

“Over-reliance on ‘Narou’ and ‘Isekai’ Genres” — In its full-year financial results for the fiscal year ending March 2026 announced on May 14, KADOKAWA reported that consolidated operating profit fell from 8.9 billion yen to 4.0 billion yen, nearly halving from the previous year. In particular, its flagship publishing business fell into an operating loss of 1.0 billion yen, down from a profit of 3.2 billion yen the previous year. The company attributes this to an over-reliance on specific genres.

Regarding the factors behind the decline in profitability, the company explicitly stated in its financial results materials that it was due to “excessive reliance on existing winning formulas.” It analyzed that the overreliance on specific genres with a proven track record, such as “Narou and isekai,” led to market saturation, and the homogenization of projects resulted in a decrease in innovative initiatives. Although the company increased the number of titles published by actively hiring editors, the rise in works lacking quality or novelty failed to generate hits, leading to a decline in circulation per title.

Additionally, the company cited four factors that put pressure on profits: a decentralized approach that allocated promotional and sales resources across individual titles, and the inability to fully absorb rising manufacturing and logistics costs through pricing. ……