Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant driver of revenue for Kadokawa, FromSoftware's parent company. This follows a major cyberattack that impacted the company's finances. Continue reading for details on the security breach and Kadokawa's recent 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 cyberattack targeting Kadokawa. They reportedly stole substantial data, including strategic plans and user information. Kadokawa confirmed on July 3rd that the breach compromised Dwango employee data, internal documents, and some data from affiliated companies.
According to Gamebiz, the security breach cost Kadokawa approximately 2 billion yen (roughly $13 million), leading to 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 fully restored its business operations. While the publishing and IP creation sectors are experiencing a gradual recovery in shipping volumes, anticipated to be back to normal by mid-August, the video game sector showcased remarkable resilience.
Sales in the video game sector soared to 7,764 million yen, representing an impressive 80.2% year-on-year increase. Ordinary profit in this sector also saw a substantial 108.1% rise. This outstanding performance is largely attributed to the exceptional success of Elden Ring and its Shadow of the Erdtree DLC.
