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 cyberattack targeting Kadokawa, FromSoftware's parent company. The attack resulted in the theft of substantial data, including sensitive business information and user data. Kadokawa confirmed on July 3rd that the breach compromised personal information of all Dwango employees, internal documents, and some data from employees at affiliated companies.
According to Gamebiz, the security breach cost Kadokawa approximately 2 billion yen (roughly $13 million), leading to a 10.1% decrease in net profit year-over-year. Despite this setback, Kadokawa reported strong first-quarter financial results for the fiscal year ending June 30, 2024. This is the company's first financial report since the major cyberattack on June 8th, which disrupted various company services.
Full operational recovery has been achieved. The publishing and IP creation sectors anticipate a gradual recovery in shipping volumes for affected publications, with a return to normal daily shipments expected by mid-August. Several affected major web services are also resuming normal operations.
The video game sector demonstrated exceptional growth, with sales reaching 7,764 million yen—an impressive 80.2% increase compared to the previous year—and ordinary profit soaring by 108.1%. This remarkable performance is largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, which significantly boosted the gaming division's revenue.
