Kadokawa Projects 60% Gaming Profit Drop Next Year After Elden Ring Peak

Sagar Mankar
3 days ago
2 min read

After riding high on the success of Elden Ring and its Shadow of the Erdtree expansion, Kadokawa Corporation is preparing for a steep decline in gaming profits for fiscal year 2025.

The company’s latest financial report outlines a projected 60% drop in operating income for its gaming division, signaling a quieter year ahead—at least on paper.

Post-Elden Ring “Correction Year”

Kadokawa’s gaming segment posted impressive results in FY2024, with:

Net sales of 33.6 billion yen (up 32.5% year-over-year)
Operating income of 9.54 billion yen (up 20% YoY)

These gains were largely fueled by record-breaking sales of Elden Ring and its DLC. However, the company now anticipates FY2025 results as:

Net sales of 26 billion yen (down 21.2% YoY)
Operating income of 3.8 billion yen (down 60% YoY)

Kadokawa describes this downturn as a “reaction to the previous fiscal year,” suggesting that last year’s numbers were unusually high due to Elden Ring’s blockbuster performance.

Strategy for Rebound: Nightreign, Switch 2, and More

Kadokawa isn't giving up, though. The company hopes to "exceed the forecast with new hit titles and expanded sales of past titles" as it works to maximize Elden Ring's long-term value.

Two key titles are leading this charge:

Elden Ring: Nightreign

Release Date: May 30, 2025

Platforms: PC, PS4, PS5, Xbox Series X/S

A multiplayer cooperative roguelite spin-off set in the Elden Ring universe, Nightreign features team-based boss battles against “Nightlords.” While early fan reactions are more muted than for the main game, the developers have already promised difficulty balancing based on player feedback from earlier network tests.

Elden Ring: Tarnished Edition (Switch 2 Exclusive)

Release Window: Late 2025

Platforms: Nintendo Switch 2

This enhanced version bundles the base game with new playable classes, additional Torrent mount designs, and new features, which will also be patched into existing versions on other platforms. Positioned as a major draw for the Switch 2 launch window, it’s expected to introduce the franchise to a broader handheld audience.

The Duskbloods

Another wildcard in Kadokawa’s arsenal is The Duskbloods, a new multiplayer-focused IP in development exclusively for the Switch 2. While some fans are wary of the studio’s growing emphasis on online gameplay, FromSoftware president Hidetaka Miyazaki has reassured the community that their hallmark single-player design philosophy remains intact.

Beyond Elden Ring, Kadokawa Group is currently working on:

21 console titles across studios like FromSoftware, Spike Chunsoft, Gotcha Gotcha Games, and Acquire
5 additional titles via partnerships with VIC GAMES and KADOKAWA publishing

Final Thoughts

While a sharp profit correction was expected after the towering success of Elden Ring, Kadokawa’s ambitious release strategy—especially its bet on Switch 2—suggests it’s playing a long game. If Nightreign and Tarnished Edition find solid audiences, the company may outperform its conservative outlook.