Tencent concerned they will lose their position as leading game company

[shrike0fth0rns]

I dunno, probably similar in a way how they pressed Microsoft for better terms on ABK

But more realistically, probably coming to some sort of agreement. As a priority investment, Tencent gains less from their Kadokawa/From Software shares over time than Sony does in terms of how they can leverage that investment with other investments (internal and external) in that space. Tencent doesn't have its own anime streaming service; Sony does. Tencent doesn't make their own games; Sony does. Tencent doesn't make shows/movies or adaptations of game & anime/manga IP; Sony does.

If Sony opened up shares of their own for Tencent to buy into the company, Tencent would probably be more than willing to give up their FromSoft and Kadokawa shares to Sony. That's what leverages and synergies can get you. It's not purely about market valuations and capital, your thinking in that regard is outdated.

Thinking about Sony selling any significant amount of shares to recent would face heavy scrutiny in Japan. Sony is a corporation of national security importance to Japan. Tencent has close ties to the ccp and the ccp has golden share in tencent with at least one ccp official sitting in the board. No way would the Japanese government be comfortable with Sony getting so intimately involved with Tencent especially not in the current political climate.