Niconico's Services
Kadokawa stated that its Dwango subsidiary's Niconico video services will remain suspended. However, the company stated that it has resumed Niconico Manga's smartphone version and Niconico Channel Plus on Friday. It previously began providing provisional services to users, including Niconico Video (Temporary Name), Niconico Live Streaming (Temporary Name), and Niconico Commons (Temporary Name)
A temporary version of Nico Nico Douga (Niconico's previous name), among other temporary services, had been set up as of June 16. Users can view videos and leave comments. A reduced line-up, consisting of mainly popular videos from 2007, are available on the website for free viewing.
The company had previously stated that 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.
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 Friday.
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