Elden Ring and its acclaimed DLC, Shadow of Erdtree, have emerged as a powerful force behind the robust performance of Kadokawa's gaming sector. Dive deeper into the details of the recent security breach and Kadokawa's financial performance within its gaming division.
Elden Ring and DLC Propel Kadokawa’s Sales in the Game Sector
Kadokawa’s Security Breach Incurs $13 Million in Losses
On June 27, the notorious hacking group Black Suits took credit for a cyberattack on Kadokawa, the parent company of FromSoftware. They claimed to have pilfered a substantial amount of sensitive data, including business plans and user-related information. Kadokawa later confirmed on July 3 that the breach compromised the personal information of all Dwango employees, internal documents, and some data from employees of affiliated companies.
According to Gamebiz, the cyberattack resulted in a staggering loss of approximately 2 billion yen, equivalent to around $13 million, and contributed to a 10.1% decrease in net profit from the previous year. Despite this setback, Kadokawa reported impressive financial results for the first quarter of the fiscal year ending June 30, 2024. This marks the first financial report since the significant cyberattack on June 8, which temporarily disrupted several of the company’s services.
Fortunately, Kadokawa has fully restored its business activities. In the publishing and IP creation sectors, the shipping volumes of affected publications are expected to recover gradually in August, with daily shipments returning to normal by mid-August. Several major web services that were impacted are also on track to resume normal operations.
The company's video game sector has seen remarkable growth, with sales soaring to 7,764 million yen—a significant 80.2% increase from the previous year—and ordinary profit rising by an impressive 108.1%. This stellar performance is largely driven by the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, which have significantly boosted the gaming division.
