Introduction
Despite facing significant challenges, Kadokawa Corporation’s gaming sector, led by the immense success of Elden Ring: Shadow of the Erdtree, has delivered substantial growth. This blog post delves into the recent financial outcomes and highlights the vital role of Elden Ring: Shadow of the Erdtree in ensuring the company’s sustained success.
Financial Impact of the Cyberattack
In the first quarter of the current fiscal year, Kadokawa Corporation experienced extraordinary losses due to a cyberattack. The attack incurred approximately 2,000 million yen ($13.5 million) in losses, primarily disrupting services and resulting in data leaks. These losses included compensation expenses for creators on the Niconico video-sharing service and costs related to investigation and restoration efforts. Consequently, Kadokawa saw a 10.1% drop in net profit.
Remarkable Growth in Gaming Sector
Contrary to the losses incurred from the cyberattack, Kadokawa’s video game sector exhibited remarkable growth. The gaming division achieved a robust 80.2% year-on-year increase in net sales, totaling 7,744 million yen ($52 million). This impressive growth was primarily due to the strong domestic sales of Elden Ring: Shadow of the Erdtree and increased repeat sales of the base game. The report indicated that both releases significantly drove Kadokawa’s financial results in its gaming sector.
Success of Elden Ring: Shadow of the Erdtree
The financial report covers only the first ten days post-release of Elden Ring: Shadow of the Erdtree, yet the impact is already monumental. The DLC sold 5 million copies within its first three days, showcasing its significant market penetration and popularity. Together with Elden Ring’s initial launch success, Shadow of the Erdtree has reinforced Kadokawa’s position in the gaming industry. Critics have praised the DLC, describing it as a continuation of FromSoftware’s renowned quality, with one review awarding it a high score of 95.
Conclusion
In conclusion, despite the substantial financial setbacks caused by a cyberattack, Kadokawa Corporation’s gaming sector, bolstered by the success of Elden Ring: Shadow of the Erdtree, has led to a significant increase in net sales and ordinary profit. As the gaming industry continues to evolve, the exceptional performance of releases like Shadow of the Erdtree plays a crucial role in shaping the financial stability and growth of companies like Kadokawa.
