KADOKAWA’s gaming business recorded a sharp decline during the first quarter of fiscal 2027, with revenue falling 37.4% year over year as the company faced a difficult comparison following the launch of Elden Ring Nightreign. The company is nevertheless maintaining its full year forecast as several major releases from FromSoftware and Spike Chunsoft approach.
For the three months ended June 30, 2026, KADOKAWA’s gaming segment generated ¥5.42 billion in net sales, down from the same period last year. Operating profit fell 58.8% to ¥1.39 billion.
The decline was largely attributed to Elden Ring Nightreign, which made a substantial contribution during the corresponding quarter last year. Elden Ring itself continues to generate repeat sales, but these were not enough to offset the decline following Nightreign’s launch period.
Despite the weaker opening quarter, KADOKAWA has maintained its gaming forecast for the financial year ending March 31, 2027.
The company expects the gaming segment to generate ¥31.2 billion in revenue and ¥4.5 billion in operating profit for the full year. Revenue would represent a 4.8% increase from the previous fiscal year, while operating profit is expected to decline 40.3%.
The latest results also show that repeat sales and royalties accounted for a larger portion of gaming revenue during the quarter, with new console and PC releases making a relatively small contribution.
FromSoftware’s upcoming releases are expected to play an important role in KADOKAWA’s plans for the remainder of the fiscal year.
Elden Ring Tarnished Edition is scheduled to launch on August 28, 2026. KADOKAWA also lists The Duskbloods, FromSoftware’s new title, as a 2026 release.
The company expects both projects to help expand FromSoftware’s audience globally, although it has not provided individual sales forecasts for either game.
KADOKAWA is also expecting contributions from Spike Chunsoft, which has multiple projects in development.
Super Danganronpa 2×2 is scheduled for early 2027, while the company is also preparing new mobile games based on its animation properties. A new Konosuba game is among the projects being planned.
With the first quarter affected by the absence of Elden Ring Nightreign’s launch impact, KADOKAWA is now relying on its upcoming releases to strengthen the gaming segment over the remainder of the financial year.
The unchanged full year forecast indicates that management expects the FromSoftware and Spike Chunsoft pipeline to offset the weaker start and support gaming revenue growth through the rest of fiscal 2027.
