Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant driver of growth for Kadokawa Corporation's gaming division, offsetting losses from a recent cyberattack. This article delves into the financial impact of the security breach and the remarkable success of FromSoftware's flagship title.
Elden Ring and DLC Power Kadokawa's Gaming Sector Growth
$13 Million in Losses from Kadokawa Cyberattack
On June 27th, the hacking group Black Suits claimed responsibility for a data breach targeting Kadokawa, FromSoftware's parent company. The attack compromised sensitive data, including business strategies and user information. Kadokawa confirmed on July 3rd that the breach affected Dwango employee data, internal documents, and some data from affiliated companies.
According to Gamebiz, the security incident cost Kadokawa approximately 2 billion yen (roughly $13 million), resulting in a 10.1% decline in net profit year-over-year. Despite this significant setback, Kadokawa reported robust first-quarter financial results (ending June 30, 2024), its first report since the June 8th cyberattack.
Business operations have since fully recovered. While the publishing and IP creation sectors experienced temporary disruptions, full recovery is anticipated by mid-August. Major affected web services are also returning to normal operation.
The gaming sector, however, showcased exceptional resilience. Sales surged to 7,764 million yen, representing an impressive 80.2% year-on-year increase, with ordinary profit climbing by 108.1%. This outstanding performance is largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC.
