Elden Ring and its highly anticipated DLC, Shadow of Erdtree, have emerged as a pivotal force behind the impressive performance of Kadokawa’s gaming division. These titles have not only revitalized the sector but also helped the company rebound from a significant cyberattack earlier this year. The success of these games has been instrumental in offsetting losses incurred during the breach.
In late June, the hacking group Black Suits took responsibility for breaching Kadokawa, the parent company of renowned developer FromSoftware. They claimed to have accessed sensitive data such as business plans and user-related information. Kadokawa later confirmed that the attack compromised personal data of Dwango employees, internal documents, and employee records from affiliated companies. The incident resulted in approximately 2 billion yen ($13 million) in damages and a 10.1% dip in net profits compared to the prior year. Despite this setback, Kadokawa delivered robust financial results for the first quarter of the fiscal year ending June 30, 2024—their first report post-breach.
Business operations have since been fully restored. While some affected publications will see gradual recovery in August, with full normalization expected by mid-month, major web services are also returning to regular functioning. However, it’s the gaming segment that has shone brightest. Sales in this division surged to 7,764 million yen, marking an 80.2% increase year-over-year, while ordinary profits climbed by 108.1%. This remarkable turnaround is largely credited to Elden Ring and its DLC, which acted as a powerful catalyst for growth.
The Impact of Elden Ring and Its DLC
Elden Ring, developed by FromSoftware and published by Bandai Namco, has consistently been a global phenomenon since its release in February 2022. The game’s expansive open world, deep lore, and challenging combat mechanics have captivated players worldwide. Its DLC, Shadow of Erdtree, released in March 2024, added new storylines, areas, and gameplay elements, further enriching the experience. Together, these releases have become a lifeline for Kadokawa’s gaming arm, providing much-needed momentum following the cyberattack.
Challenges Post-Breach
While the gaming division saw unprecedented success, Kadokawa faced several hurdles in other sectors due to the cyberattack. Personal data breaches and operational disruptions led to delays in publication shipments and web service restoration. Nevertheless, the company remains optimistic about the future, leveraging the strength of its gaming portfolio to navigate challenges ahead.
Looking Ahead
With Elden Ring and its DLC proving to be a windfall for Kadokawa, the company is poised to capitalize on this momentum. As services stabilize and operations normalize, the focus will shift toward sustaining growth and expanding the gaming ecosystem. Fans eagerly await further updates from both Elden Ring and FromSoftware, hoping for more innovative projects in the pipeline.
