Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant catalyst for the success of Kadokawa Corporation's gaming division. This article explores the impact of a recent cyberattack and examines Kadokawa's first-quarter financial report.
Elden Ring and its 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 data breach targeting Kadokawa, FromSoftware's parent company. The stolen data reportedly included business strategies and user information. Kadokawa confirmed on July 3rd that the breach compromised personal data of all Dwango employees, internal documents, and some employee data from affiliated companies.
According to Gamebiz, the security incident cost Kadokawa approximately 2 billion yen (roughly $13 million), leading to a 10.1% decline in net profit compared to the previous year. However, Kadokawa still reported robust financial results for the first quarter (ending June 30, 2024), its first report since the June 8th cyberattack that disrupted various company services.
Operations have since fully resumed. The publishing and IP creation sectors anticipate a gradual recovery in August, with daily shipments expected to normalize by mid-August. Major affected web services are also returning to normal operation.
The video game sector showcased remarkable growth, with sales reaching 7,764 million yen—a substantial 80.2% increase year-over-year—and ordinary profit soaring by 108.1%. This exceptional performance is largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, providing a significant boost to the gaming division's bottom line.
