Elden Ring and its Shadow of the Erdtree expansion pack are proving to be a significant revenue driver for Kadokawa, 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.
Kadokawa's Financial Performance: Elden Ring's Resounding Success
A June 27th cyberattack by the Black Suits hacking group resulted in the theft of substantial data from Kadokawa, including business plans and user information. This breach, confirmed on July 3rd, compromised personal data of Dwango employees, internal documents, and information from affiliated companies. The resulting financial repercussions included approximately 2 billion yen (roughly $13 million) in losses and a 10.1% decline in net profit year-over-year.
However, Kadokawa reported robust first-quarter financial results (ending June 30, 2024), showcasing resilience following the June 8th cyberattack. While the attack initially disrupted services, business operations have fully recovered. Publishing and IP creation sectors anticipate a gradual return to normal shipping volumes by mid-August. Major affected web services are also resuming normal operations.
The gaming sector, however, experienced exceptional growth. Sales soared to 7,764 million yen, representing an impressive 80.2% increase compared to the previous year. Ordinary profit in this sector saw a substantial 108.1% rise. This remarkable performance is largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, which significantly boosted the gaming division's revenue. The DLC, in particular, appears to have played a key role in mitigating the financial impact of the cyberattack.
