Elden Ring DLC Helps FromSoftware Bounce Back After Major Cyberattack

Elden Ring's success, particularly with its Shadow of the Erdtree DLC, is proving to be a significant driver of growth for Kadokawa's gaming division. This article delves into the impact of a recent cyberattack and examines Kadokawa's Q1 2024 financial report.

Elden Ring and its DLC Power Kadokawa's Gaming Sector

Cyberattack Costs Kadokawa $13 Million

On June 27th, the hacking group Black Suits claimed responsibility for a cyberattack targeting Kadokawa, FromSoftware's parent company. The attack reportedly compromised substantial data, including business strategies and user information. Kadokawa confirmed on July 3rd that the breach affected Dwango employee data, internal documents, and some information from affiliated companies.

According to Gamebiz, the breach cost Kadokawa approximately ¥2 billion (around $13 million), resulting in a 10.1% decrease in net profit year-on-year. However, Kadokawa still reported robust first-quarter (ending June 30, 2024) financial results, marking a recovery following the June 8th cyberattack which initially disrupted various company services.

Full operational recovery has been achieved. While the publishing and IP creation sectors experienced temporary setbacks, a gradual recovery is underway, with normal shipping volumes projected by mid-August. Major affected web services are also returning to full functionality.

The video game sector demonstrated exceptional growth, with sales reaching ¥7,764 million—a remarkable 80.2% surge compared to the previous year—and ordinary profit increasing by 108.1%. This impressive performance is largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree expansion, significantly boosting the gaming division's revenue.