Kadokawa faces significant operational challenges following a cyber attack that severely disrupted its systems.

On June 14, 2024, the Company provided a detailed update on the impact and ongoing recovery efforts.

The cyberattack occurred on June 8, targeting Kadokawa's data center servers with ransomware. The attack severely impacted the company's publishing business and digital services.

In response, Kadokawa took immediate action by shutting down the affected servers to prevent further damage and protect data.

This decision, however, resulted in widespread operational disruptions across the company's various business units.

Impact on publishing business:

According to Kadokawa's latest report, the decision to shut down servers has caused major delays in the publication of new titles and a reduction in production volumes of manga and other books.

Digital production plants and logistics systems, essential for the timely production and distribution of new titles and reprints, have been severely disrupted.

This resulted in a decrease in quantities shipped, impacting the availability of new and existing titles on the market.

Furthermore, support systems for publishing and producing printed and electronic books are inoperative.

This disrupted the workflow of editors and production teams, potentially affecting the release schedules of upcoming publications.

Impact on digital services and e-commerce:

The repercussions of the cyberattack go beyond the publishing sector, impacting Kadokawa's digital services and e-commerce operations.

All Niconico family services, including Niconico Douga, Niconico Live Broadcast, and Niconico Channel, are currently suspended.

Additionally, several online stores operated by the company face challenges in processing and shipping orders.

The company’s accounting systems were also disrupted, causing a temporary halt in settlement processes. This could lead to delays in payments to business partners.

Kadokawa also revealed that the incident will have an impact on its fiscal year performance, although its extent is currently unknown.

“The impact of this incident on our current fiscal year performance remains unclear at this time. We will promptly disclose any significant findings as they are identified.“

Recovery efforts and timeline:

In response to the crisis, Kadokawa revealed that it has created a task force dedicated to managing recovery efforts. The company is prioritizing the restoration of its accounting functions and the normalization of its manufacturing and logistics operations.

These recovery efforts will be implemented in stages, with the goal of fully restoring key systems by the end of June.

Furthermore, it was also revealed that the recovery of Niconico services will take longer, as the systems need to be rebuilt in a safe environment, a process that is expected to take more than a month.

“We will continue to strive for the quickest possible recovery, working as a unified group to fully restore the normalization of the system and business activity. We apologize once again for the inconvenience and significant disruption caused to all stakeholders, including our customers.”, they added.

Source: Kadokawa's Latest report