Elden Ring and its DLC, Shadow of the Erdtree, have emerged as a powerful catalyst for the performance of Kadokawa's gaming sector. Dive deeper to understand the impact of a recent security breach and the financial outcomes detailed in Kadokawa's latest report.

Elden Ring and DLC Propel Kadokawa’s Game Sector Sales

Kadokawa’s Security Breach Incurs $13 Million in Losses

On June 27, the notorious hacking group Black Suits announced their responsibility for a cyberattack on FromSoftware's parent company, Kadokawa. They claimed to have pilfered a vast trove of data, including sensitive business plans and user-related information. Kadokawa officially acknowledged the breach on July 3, revealing that it compromised the personal information of all Dwango employees, internal documents, and some data from employees at affiliated companies.

According to Gamebiz, the security breach cost Kadokawa Corporation approximately 2 billion yen, equivalent to about $13 million, and led to a 10.1% decline in net profit compared to the previous year. Despite this setback, Kadokawa reported robust financial results for the first quarter of the fiscal year ending June 30, 2024. This marks the company's first financial disclosure since the significant cyberattack on June 8, which temporarily disrupted several services.

Fortunately, Kadokawa has fully restored its business operations. In the publishing and IP creation sectors, the company anticipates a gradual recovery in shipping volumes for affected publications starting in August, with daily shipments expected to normalize by mid-August. Additionally, several major web services that were impacted are scheduled to resume normal operations soon.

The video game sector of Kadokawa experienced remarkable growth, with sales soaring to 7,764 million yen—an impressive 80.2% increase from the previous year. Ordinary profit also surged by 108.1%. This stellar performance was largely driven by the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, which significantly boosted the gaming division's results.