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Cyber Attack Delays Kadokawa's Releases, Accounting With Niconico Expected to Stay Offline for 1 Month or More
posted on by Anita Tai
Kadokawa Corporation issued a statement on its temporary website on Friday to announce the continued suspension of its Dwango subsidiary's Niconico video services, following the cyber attack on June 8. The company is temporarily suspending Niconico's services in order to fully investigate the circumstances surrounding the incident, which it predicts will take at least a month. In a separate statement, Kadokawa also acknowledged other business operations were affected including publication, merchandise, and accounting systems. This will cause delays in the release of some publications and merchandise.
Niconico head Shigetaka Kurita and chief technology officer Keiichi Suzuki gave further details in a video addressing the impact of the attack on Sunday.
Cyber Attack and Investigation
Kadokawa stated that after confirming the outages were due to a wide-scale cyber attack, including the use of ransomware, it immediately set up an emergency task force to investigate and restore services to affected servers. Ransomware is a type of malware that encrypts data or denies services, then demands victims make a payment to restore them. The attack seemed to be focused on the Niconico services.
While the company is still investigating the full extent of damages, it revealed the attack had managed to reach the internal network, leading to the shutdown and lack of access to internal systems. Niconico's services rely on public data servers as well as Kadokawa's private servers, with the latter being the target of the attack.
Despite the company shutting down its own servers to isolate the damage, the cyber attack's perpetrator was observed to be remotely restarting those servers to continue the malware's spread. To stop this, the staff physically disconnected the servers' power and communications cables. Employees at the company's Kabuki-za offices were also prohibited from entering the premises, and internal networks and services were shut down.
Kadokawa notified police of the situation on June 9, and consulted external specialists. Kadokawa also notified the Kanto Local Finance Bureau.
Niconico's Services
Niconico's video and live streaming services rely on the public cloud servers and were not directly affected by the attack. The system controlling the live streaming service, however, is on private company-held servers, so access to time-shifted media may not be available.
A list of suspended services includes:
- Niconico Dōga, Niconico Live streaming, Niconico Channels, and other services within the Niconico family
- Niconico account login to external services
- Music monetization
- Dwango Ticket
- Select Dwango JP Store services
- Remote N Prep School (the services for the remote-learning N and S High Schools have already been restored)
Any leak of personal data including credit card information has not been confirmed as of June 14, but the investigation is ongoing.
Kadokawa cannot confirm a date for when full services will be restored, as the investigation is ongoing, but estimates the investigation will take over a month. Services will be restored gradually during this time.
Niconico Premium members and paid members of channels will be compensated for the months of June and July. Niconico Channel operators will be compensated for their earnings during this time as well.
All scheduled programming on Niconico will be cancelled until the end of July.
Niconico Manga services are expected to return to operation by the end of June.
Effects on Kadokawa's Business Operations
The cyber attack has also affected Kadokawa's other business operations, including the suspension of the domestic print ordering system, digital production, and digital logistics. The resulting suspension of orders, reduction in production output, and delays in physical distribution is leading to a drop in publication releases. As some support systems for domestic editing and production of print and digital publications have been suspended, Kadokawa projects delays in some new publications and reprints.
In turn, online merchandise orders for stores under the Kadokawa umbrella are also affected as some systems cannot receive and ship orders.
The company aims to restore core systems and establish a more secure network system by the end of June.
Kadokawa apologized for possible delays in payments to its business partners and vendors, as its accounting systems were also affected by the cyber attack.
Sources: Kadokawa's temporary website, (link 2), (link 3), Dwango, (link 2), Shigetaka Kurita's Twitter/X account, NIco Nico's YouTube channel
Disclosure: Kadokawa World Entertainment (KWE), a wholly owned subsidiary of Kadokawa Corporation, is the majority owner of Anime News Network, LLC. One or more of the companies mentioned in this article are part of the Kadokawa Group of Companies.
