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Elden Ring and its Shadow of the Erdtree expansion pack are key drivers behind Kadokawa Corporation's robust video game sector performance, despite a significant cyberattack. This article details the impact of the June cyberattack and Kadokawa's subsequent financial report.
Kadokawa's Cyberattack and Financial Rebound
On June 27th, the hacking group Black Suits claimed responsibility for a data breach affecting Kadokawa, FromSoftware's parent company. The breach compromised sensitive information, including business plans and employee data, resulting in approximately $13 million (2 billion yen) in losses. This led to a 10.1% decline in net profit compared to the previous year.
Despite this setback, Kadokawa reported strong first-quarter financial results (ending June 30, 2024), showcasing a remarkable recovery. The publishing and IP creation sectors are gradually recovering from the attack, with a projected return to normal operations by mid-August.
The video game sector, however, thrived, experiencing an impressive 80.2% surge in sales, reaching 7,764 million yen. This extraordinary growth is largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, which significantly boosted the division's profitability (108.1% increase in ordinary profit). The success of these titles clearly offset the negative impact of the cyberattack. The images below illustrate the impact of the game and the cyberattack.
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