Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant driver of growth for Kadokawa Corporation's gaming division, offsetting losses from a major cyberattack. This article delves into the financial impact of the security breach and the remarkable success of the FromSoftware titles.
Elden Ring and DLC Power Kadokawa's Gaming Sector
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, encompassing business strategies and user information. Kadokawa confirmed on July 3rd that the breach compromised the personal data of all Dwango employees, internal documentation, and some employee data from 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 robust financial results for Q1 of the fiscal year ending June 30, 2024. This is the first financial report since the extensive cyberattack on June 8th, which disrupted various company services.
Full operational recovery has now been achieved. In the publishing and IP creation sectors, the recovery of shipping volumes for affected publications is underway, with a projected return to normal daily shipments by mid-August. Several significantly impacted web services are also resuming normal operations.
The video game sector demonstrated exceptional growth, with sales reaching 7,764 million yen—a substantial 80.2% increase compared to the previous year—and operating profit soaring by 108.1%. This impressive performance is largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, providing a critical boost to the gaming division's bottom line.
