FromSoftware Recovers with Elden Ring DLC Post-Cyberattack

Elden Ring and its expansion, Shadow of Erdtree, have proven to be a significant catalyst in boosting the performance of Kadokawa's gaming sector. Despite facing a major setback due to a cyberattack, the success of these titles has been instrumental in driving sales and profits for the company.

Kadokawa’s Security Breach Cost $13 Million in Losses

On June 27, the hacking group Black Suits announced their involvement in a cyberattack against FromSoftware's parent company, Kadokawa. They claimed to have accessed a substantial volume of data, which included business strategies and personal user data. Kadokawa officially acknowledged the breach on July 3, revealing that it compromised the personal information of all Dwango employees, internal company documents, and some data from employees at affiliated companies.

As reported by Gamebiz, the security breach resulted in a financial hit of approximately 2 billion yen, equivalent to about $13 million, and led to a 10.1% decrease in net profit compared to the previous year. Nevertheless, Kadokawa showcased robust financial outcomes for the first quarter of the fiscal year ending June 30, 2024. This was the company's initial financial disclosure following the extensive cyberattack on June 8, which had temporarily disrupted various services.

Fortunately, normal business operations have been fully restored. In the publishing and intellectual property sectors, the shipping of affected publications is expected to gradually recover in August, with daily shipments projected to return to normal levels by mid-August. Additionally, several major web services that were impacted are scheduled to resume standard operations soon.

The video game sector of Kadokawa experienced remarkable growth, with sales amounting to 7,764 million yen, marking an 80.2% rise from the previous year. The ordinary profit also saw a significant increase of 108.1%. This impressive performance was largely driven by the popularity and sales of Elden Ring and its Shadow of the Erdtree DLC, which played a crucial role in enhancing the gaming division's financial results.