FromSoftware Recovers with Elden Ring DLC Post-Cyberattack

Elden Ring and its DLC, Shadow of the Erdtree, are proving to be a formidable force in driving sales within Kadokawa’s gaming sector. Dive deeper to understand the recent security breach and Kadokawa’s financial performance in its gaming division.

Elden Ring and DLC Propel Kadokawa’s Game Sector Sales

Kadokawa’s Security Breach Incurs $13 Million in Losses

On June 27, the hacking group known as Black Suits announced they had launched a cyberattack on FromSoftware's parent company, Kadokawa. They claimed to have pilfered substantial data, including business strategies and user-related information. Kadokawa confirmed 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 roughly 2 billion yen, equivalent to about $13 million. This incident 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 was the company’s first financial report since the significant cyberattack on June 8, which had disrupted several of its services.

Fortunately, Kadokawa has fully restored its business operations. In the publishing and IP creation sectors, shipping volumes for affected publications are expected to gradually recover in August, with daily shipments returning to normal by mid-August. Several major web services that were impacted are also slated to resume normal operations soon.

Kadokawa's video game sector, however, has shown 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 can be largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, which have significantly bolstered the gaming division.