Elden Ring's success, including its Shadow of the Erdtree DLC, significantly boosted Kadokawa's gaming sector performance, proving a powerful counterbalance to a recent cyberattack. This article delves into the details of the security breach and Kadokawa's subsequent financial report.
Elden Ring and its DLC Power Kadokawa's Gaming Division
$13 Million in Losses Due to 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 sensitive business information and user data. On July 3rd, Kadokawa confirmed the breach compromised Dwango employee data, internal documents, and some information from affiliated companies.
According to Gamebiz, the breach cost Kadokawa approximately 2 billion yen (roughly $13 million), leading to a 10.1% decline in net profit year-on-year. Despite this significant 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 June 8th cyberattack, which temporarily disrupted various services.
Kadokawa has since fully restored its business operations. While the publishing and IP creation sectors experienced temporary disruptions, a gradual recovery is underway, with a projected return to normal daily operations by mid-August. Major affected web services are also nearing full restoration.
However, the video game sector showcased remarkable resilience. Sales reached 7,764 million yen—a substantial 80.2% increase compared to the previous year—with 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, which served as a crucial driver of growth for the gaming division.
