Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant boon for Kadokawa Corporation, FromSoftware's parent company, despite a recent cyberattack. This article delves into the financial impact of the security breach and the remarkable success of Elden Ring in offsetting those losses.
Kadokawa's Strong Q1 Results Despite Cyberattack Losses
A cyberattack on Kadokawa, claimed by the Black Suits hacking group on June 27th, resulted in the theft of substantial data, including business plans and user information. The breach, confirmed on July 3rd, affected Dwango employees' personal data, internal documents, and some information from affiliated companies. The incident cost Kadokawa approximately $13 million (2 billion yen) and led to a 10.1% decrease in net profit year-over-year.
However, Kadokawa reported robust first-quarter results (ending June 30, 2024), showcasing resilience in the face of adversity. While the publishing and IP creation sectors experienced temporary disruptions, with a gradual recovery expected through August, the video game sector thrived. Sales in this sector soared by 80.2% year-over-year, reaching 7,764 million yen, driven primarily by the exceptional performance of Elden Ring and its newly released DLC. This success led to a 108.1% increase in ordinary profit for the gaming division. The games, therefore, acted as a powerful counterbalance to the financial impact of the security breach. All major disrupted web services are also expected to return to full operation.
