Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant catalyst for the success of Kadokawa's gaming division. This article delves into 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 Dwango employee data, internal documents, and some information from affiliated companies.
According to Gamebiz, the security breach cost Kadokawa approximately 2 billion yen (roughly $13 million), resulting in a 10.1% decrease in net profit year-over-year. Despite this setback, Kadokawa reported robust 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.
Normal operations have since been fully restored. The publishing and IP creation sectors are expected to see a gradual recovery in August, with daily operations anticipated to return to normal by mid-August. Major affected web services are also nearing full restoration.
The video game sector showed remarkable growth, with sales reaching 7,764 million yen—an impressive 80.2% increase compared to the previous year—and operating 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 significantly boosted the gaming division's revenue.
