Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant catalyst for Kadokawa Corporation's gaming division, offsetting losses from a recent cyberattack. This article details the impact of the security breach and the positive financial results reported by Kadokawa.
Kadokawa's Gaming Sector Thrives Despite Cyberattack
The June 27th cyberattack, claimed by the Black Suits hacking group, resulted in the theft of substantial data, including business strategies and user information. Kadokawa confirmed on July 3rd that this breach compromised the personal details of all Dwango employees, internal documents, and some data from affiliated companies. This incident cost Kadokawa approximately 2 billion yen ($13 million) and led to a 10.1% decline in net profit year-on-year.
Despite the significant security breach, Kadokawa announced robust first-quarter financial results (ending June 30, 2024), marking its first report since the June 8th attack. Business operations have fully resumed, with publishing and IP creation sectors expecting a gradual recovery in August. Web services affected by the attack are also returning to normal functionality.
The video game division, however, showcased remarkable resilience. Sales soared to 7,764 million yen, representing an impressive 80.2% increase compared to the previous year, with ordinary profit rising by a substantial 108.1%. This exceptional performance is largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, which acted as a powerful engine for growth within the gaming sector.
