On June 8, Kadokawa Group subsidiary Niconico suffered a significant ransomware attack that initially compromised its video portal, before affecting the wider Kadokawa Group corporate conglomerate.

The attack’s severity was such that it necessitated a temporary suspension of services, to the point that staff were initially banned from the local Dwango office branch in Kabuki-za. Shigetaka Kurita, the head of Niconico, and Keiichi Suzuki, the chief technology officer, provided an update via an official video, explaining the steps being taken to address the incident.

Kadokawa subsequently notified police of the situation on June 9, and consulted external specialists, while notifying the Kanto Local Finance Bureau. Kadokawa has also released an English-language version of its secondary incident report after releasing its preliminary report on June 9, with Dwango releasing its own incident report with further detail in Japanese on June 14.

This incident has had a ripple effect across the conglomerate, impacting online merchandise orders for stores under the Kadokawa group, as some systems are currently unable to process and ship orders as well as infrastructure related to company-run websites.

The attack, which targeted Nico Nico Douga’s servers with ransomware has had a further ripple effect across the company’s various operations, leading to significant disruptions. The ransomware attack was so extensive at one point that the perpetrator was observed to be remotely restarting servers to continue the attack and spread ransomware further, forcing staff to physically disconnect power and communications cables from affected servers in order to halt the attack, according to the Dwango incident report.

Kadokawa Corporation, known for its extensive portfolio of manga, novels, magazines and media platforms has also faced a shut down of its domestic print ordering system, digital production, and logistics as a result of the attack. This has not only halted the flow of orders but also reduced production output and caused delays in physical distribution. The impact is evident in the sudden drop in publication releases as well as the halt in payments to partners.

The further shut down of support systems for domestic editing and production of both print and digital publications has compounded the impact of the incident, with Kadokawa projecting delays in upcoming new publications and reprints. This disruption extends beyond the immediate financial implications for the company; it affects the company’s entire ecosystem.

To its credit, Kadokawa’s response to the crisis has been swift, with the establishment of a task force to investigate the incident and restore systems while the company has also taken emergency measures to protect data integrity and prevent further damage. However, the full extent of the repercussions remains to be seen, as the investigation continues and the company works to regain its footing.

In a rare show of openess for a Japanese company, Kadokawa Corporation has been very transparent about its efforts to restore and secure its network, with the company setting a goal to reinstate core internal systems by fortifying its network security before the end of the month.The company is also diligently working to assess the full extent of the damages caused by the attack.

Kadokawa is currently offering a stripped down version of the Niconico Douga video portal with a selection of videos representing the first year of operation in 2007, with videos from subsequent years being added as the recovery process continues ahead of an eventual restoration of services.

As a result, Kadokawa cannot provide a definitive timeline for the full restoration of services which include the full Niconico platform and related services. The ongoing investigation into the attack is estimated to take over a month, with services expected to be reinstated over time.