Elden Ring and its Shadow of the Erdtree DLC are proving to be a powerful force behind the success of parent company Kadokawa's gaming sector. This follows a significant cyberattack, detailed below.
Elden Ring and 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 cyberattack targeting Kadokawa, FromSoftware's parent company. The attack reportedly compromised a significant amount of data, including business plans and user information. Kadokawa confirmed on July 3rd that the breach affected Dwango employee personal information, internal documents, and some data from affiliated companies.
According to Gamebiz, the 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 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 disrupted various services.
Kadokawa has since fully restored its business operations. While the publishing and IP creation sectors experienced temporary disruptions, shipping volumes are projected to fully recover by mid-August. Major impacted web services are also returning to normal operation.
The gaming sector, however, thrived. Sales reached 7,764 million yen—a remarkable 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 significantly boosted the gaming division's revenue.
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