KADOKAWA Corp. is projecting a substantial decline in its gaming business for fiscal year 2026, with sales expected to fall 22.6% to ¥26 billion (US$173 million) and operating profit plunging 60.2% to ¥3.8 billion (US$25.3 million). The company attributes this expected downturn to the challenging comparison with the previous fiscal year, which saw exceptional performance driven by the blockbuster “ELDEN RING” and its downloadable content “SHADOW OF THE ERDTREE.”
To counter this anticipated decline, KADOKAWA is banking on two key releases from its subsidiary FromSoftware: “ELDEN RING NIGHTREIGN,” a cooperative multiplayer spin-off launching May 30, 2025, and “ELDEN RING Tarnished Edition” for Nintendo Switch 2, scheduled for release later in 2025.
The company has an ambitious development pipeline across its gaming subsidiaries, with 21 console titles in production at FromSoftware, Spike Chunsoft, Gotcha Gotcha Games, and Acquire, plus 5 additional titles being developed by KADOKAWA’s main company and VIC GAMES.
This strategic pivot comes at a critical time for KADOKAWA, whose gaming division has experienced dramatic fluctuations in recent years. The original ELDEN RING release in 2022 had previously driven a staggering 1,116% increase in the division’s operating profit, setting a high benchmark that the company now acknowledges will be difficult to match in the coming fiscal year.
