Elden Ring DLC Restores FromSoftware from Cyberattack

Elden Ring's success, including its Shadow of the Erdtree DLC, significantly boosted Kadokawa's gaming sector performance, proving a powerful counterbalance to a major cyberattack. This article delves into the financial impact of the security breach and Kadokawa's Q1 2024 report.

Elden Ring and its DLC Power Kadokawa's Gaming Division

$13 Million in Losses Due to Kadokawa's Data Breach

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

According to Gamebiz, the breach cost Kadokawa approximately 2 billion yen (roughly $13 million), resulting in a 10.1% decline in net profit year-over-year. Despite this setback, Kadokawa reported strong first-quarter (ending June 30, 2024) financial results, its first report since the June 8th cyberattack.

Full recovery of business operations is underway. The publishing and IP creation sectors anticipate a gradual recovery of shipping volumes in August, with a return to normal daily operations by mid-August. Affected major web services are also resuming normal functionality.

The video game sector showcased remarkable growth, achieving sales of 7,764 million yen—an impressive 80.2% increase compared to the previous year—and a 108.1% surge in ordinary profit. This exceptional performance is largely attributed to the phenomenal success of Elden Ring and its Shadow of the Erdtree DLC, which provided a substantial boost to the gaming division's bottom line.