Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant catalyst for the success of Kadokawa's gaming division. This article delves into the impact of a recent cyberattack and examines Kadokawa's financial report.
Elden Ring and DLC Power Kadokawa's Gaming Sector Growth
Kadokawa's Cyberattack Results in $13 Million in Losses
On June 27th, the hacking group Black Suits claimed responsibility for a significant cyberattack targeting Kadokawa, FromSoftware's parent company. The attack compromised a substantial amount of data, encompassing business strategies and user information. On July 3rd, Kadokawa confirmed the breach affected Dwango employee data, internal documents, and some data from affiliated companies.
Gamebiz reports that the security breach cost Kadokawa approximately 2 billion yen (roughly $13 million), resulting in a 10.1% decline in net profit year-over-year. Despite this setback, Kadokawa announced robust first-quarter financial results (ending June 30, 2024), the first report since the June 8th cyberattack that disrupted various company services.
Kadokawa has fully restored its business operations. The publishing and IP creation sectors anticipate a gradual recovery in shipping volumes throughout August, with a return to normal daily operations expected by mid-August. Major affected web services are also resuming normal functionality.
The company's video game sector demonstrated exceptional growth, achieving sales of 7,764 million yen—an impressive 80.2% increase compared to the previous year—and a 108.1% surge in ordinary profit. This remarkable performance is largely attributed to the outstanding success of Elden Ring and its Shadow of the Erdtree DLC, which significantly boosted the gaming division's revenue.
