‭【NEWS RELEASE】‬‭July 29, 2024‬‭KADOKAWA CORPORATION‬‭[Fourth Report] Restoration Status of KADOKAWA Group‬‭Business Activities‬‭KADOKAWA CORPORATION (Headquarters: Chiyoda-ku, Tokyo; Chief Executive Officer: Takeshi Natsuno;‬‭ ereinafter “KADOKAWA”) expresses deep apologies for the significant concern and trouble caused to its‬h‭readers, users, writers, creators, business partners, shareholders, investors, and other stakeholders by the‬‭effects of the cyberattack on the file server in our group data center that was discovered on June 8.‬‭Since the incident occurred, our top priorities have been to restore accounting functions, which are the‬f‭oundation of our business activities, and to restore our publication business, which generates considerable‬‭revenue. We hereby report that accounting functions have already been restored to normal, owing partially to‬‭analog means, and that the publication business will gradually restore shipping volume beginning in August,‬‭with daily shipping volumes expected to recover to normal levels in mid-August.‬‭1. Publication business‬‭ hen the dedicated DWANGO Co., Ltd. file server suffered a cyberattack, the publication business'‬W‭manufacturing and distribution systems came to a halt due to the impact of the emergency shutdown of related‬‭servers to prevent the damage from spreading and preserve data. Since then, while building a secure network‬‭and server environment, we have been working to minimize the decrease in production and the number of‬‭shipped copies by measures including analog means that are not solely dependent on systems. As a result,‬‭production of new publications sustained normal levels in June, while the number of shipped copies of existing‬‭publication dropped to one-third of normal levels.‬‭Under these circumstances, our top priority has been a focus on restoring the publication business, including‬t‭he restoration of systems. As a result, shipping volumes will gradually recover beginning in August, and we‬‭expect that daily shipping volumes of existing publication will generally recover to normal levels in mid-August.‬‭Thereafter, by restarting the‬‭DOT (Direct Order Tablet) system‬‭, our proprietary direct ordering system connected‬‭to bookstores, and scaling up promotional activities, we will compensate for pending shipments and for titles‬‭that have been in short supply at stores since the incident as we work to recoup lost revenues.‬‭1‬‭2. Other businesses‬‭●‬ W‭ eb services business‬‭We have been rebuilding systems in a safe environment while gradually resuming services. We will‬‭resume major services such as‬‭Nico Nico Video‬‭and‬‭Nico Nico Live Streaming‬‭on August 5‬‭.‬‭After that,‬‭we‬‭expect full restoration of services in September by progressively resuming‬‭Nico Nico Channel‬‭and‬‭other services.‬‭●‬ M‭ erchandise business‬‭Wholesale product sales, which account for a large proportion of sales, are continuing normally. Our‬
‭handling and restoration of KADOKWA's online shops are as described below. Beginning in August, we‬‭expect there to be virtually no impact from the incident anywhere in the Merchandise business.‬‭○‬ ‭At some online shops where the account authentication function provided by KADOKAWA has‬‭failed, we aim to correct those failures or introduce alternative authentication functions in early‬‭August.‬‭○‬ ‭At online shops where access has been denied, our response will include adding stores inside‬‭other shops.‬‭3. Impact on business performance‬‭ ‬‭The impact of this matter on KADOKAWA Group's business‬‭performance in the current fiscal year is currently‬‭under investigation. KADOKAWA will make an announcement promptly if any matter that should be disclosed‬‭arises.‬‭ . Status of information leakage investigation‬4‭ ‬‭We are currently in the process of investigating the leaked information with the assistance of a major outside‬‭security firm. However, at present we have not completed the investigation. We will report on this matter further‬‭as soon as more accurate information comes to light.‬‭KADOKAWA reiterates its deepest apologies to its customers and all those concerned for the considerable‭concern and trouble this matter has caused.‬‭Occurring in stages beginning in August, we will work to achieve the stable provision of products and‬‭services, as well as to promptly reverse the impact from this incident, with the aim of achieving sustainable‬‭business growth.‬‬‭End of document‬‭ or media inquiries, please contact:‬
F‭Investor and Public Relations Division, KADOKAWA CORPORATION‬‭Email: pr-dept@kadokawa.jp‬‭2‬