Publisher to scale up promotional activities, compensate for pending shipments after cyber attack
© Kadokawa
Kadokawa Corporation announced on Monday that the company’s book publishing business will gradually resume shipping in August, with daily shipping volumes expected to return to normal levels in the middle of the month, following the cyber attack on the company on June 8. The company also noted that it has restored accounting functions, “owing partially to analog means.”
By September, the company expects to be able to scale up its promotional activities again, compensate for pending shipments and titles that have had supply problems, and reactivate its “Direct Order Tablet” (DOT) system, a direct order system connected to bookstores.
Kadokawa added that due to its partially analog measures to alleviate the decrease in production and shipping, it sustained normal levels of production for new publications in June, while shipping of existing publications dropped to one-third of normal levels. Kadokawa also expects that by August, its merchandise sales will see “virtually no impact” from the cyber attack.
Kadokawa‘s Dwango subsidiary announced last Friday that a number of services from its Niconico video site will resume operation beginning August 5 with a new version of the website. Livestreaming on the website and channels will gradually return to service throughout August. The company also revealed that it has rebuilt its systems and implemented new security measures with assistance from an outside specialist. The company confirmed it is still assessing the full scope of damages from the cyber attack.
Cyber Attack and Investigation
While Kadokawa is still investigating the possibility for information leakage with the support of external professional
organizations, the company stated that it does not retain customers’ credit card information (for its Niconico service) so there is no possibility of a credit card information leak. It stated that it will release more information reagrding further investigations in July.
In Kadokawa‘s previous statement, the company elaborated that it had 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, which seemed to be focused on the Niconico services, 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.
The company had shut down its own servers to isolate the damage, but 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.
Effects on Kadokawa‘s Business Operations
Kadokawa stated that it is working to minimize the attack’s impact on the manufacturing end of its publishing business by changing the workflow to not be solely dependent on systems. While the company will produce new publications at its normal rate, the domestic editing and production of print publications and reprints of books will take place in order of priority. The company also clarified that while the distribution of certain e-books were delayed due to the system failure, its current production of e-books is unaffected.
The company is taking measures such as increasing human resources for the foreseeable future for both its manufacturing and shipping operations. The company’s total shipments are at “about one-third of the normal level” as of June 28.
Online merchandise orders for stores under the Kadokawa umbrella are affected as some systems cannot receive and ship orders. The company is creating temporary landing pages for its online shops for users who are unable to access them. It is also considering implementing alternative authentication functions for the online shops where users’ log in credentials are no longer functioning.
The attack is no longer affecting the wholesale of merchandise, and the company’s shipping systems for merchandise as functioning as usual.
Source: Kadokawa‘s temporary website
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.
