Elden Ring and its Shadow of the Erdtree expansion pack are key drivers behind the robust performance of Kadokawa's gaming division. This article examines the impact of a significant cyberattack and analyzes Kadokawa's recent financial report.
Elden Ring and its DLC Power Kadokawa's Gaming Sector Growth
$13 Million in Losses Resulting from Kadokawa's Data Breach
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 business strategies and user information. Kadokawa confirmed on July 3rd that the breach compromised personal data of all Dwango employees, internal documents, and some data from affiliated companies.
According to Gamebiz, the security breach cost Kadokawa approximately 2 billion yen (roughly $13 million), leading to a 10.1% decline 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 large-scale cyberattack on June 8th, which temporarily disrupted various services.
Business operations have since fully recovered. The publishing and IP creation sectors anticipate a gradual recovery of shipping volumes for affected publications throughout August, with a return to normal daily shipments expected by mid-August. Major affected web services are also resuming normal operations.
The video game sector demonstrated remarkable growth, achieving sales of 7,764 million yen—an impressive 80.2% increase compared to the previous year—and a 108.1% surge in operating profit. This outstanding performance is largely attributed to the exceptional success of Elden Ring and its Shadow of the Erdtree DLC, which significantly boosted the gaming division's revenue.
