KADOKAWA CEO Takeshi Natsuno shared how the company uses and explores artificial intelligence (AI) for anime creation in a new interview with The Worldfolio. When asked about Kadokawa’s approach, Natsuno said:
“At this point, we see AI primarily as a support tool, because it still can’t be truly creative on its own. I actually come from the IT industry and still hold a university position as a professor, so I have a fairly strong understanding of this subject.“
“AI depends on data—large volumes of it—and while this enables the technology to function effectively, it also leads to standardization. That standardization tends to flatten creative expression. AI can reproduce patterns, but it can’t generate the kind of originality that defines powerful storytelling. A series like【Oshi no Ko】, for example, is too imaginative and unconventional—something AI could never come up with on its own.
That’s why, at the moment, we use AI mainly to support artists. Although it is still in the testing phase, for instance, it’s helpful in tasks like coloring animation cels after the drafts are completed. It enhances efficiency without interfering with the core creative process.“
Natsuno continued, “When I became head of the company, I told my team that I wanted Kadokawa to become a tech-driven company. My vision was that, by fully embracing technology, we could streamline workflows and free up our creators to focus on developing truly original stories. I see technology and creativity as the two wheels that drive Kadokawa forward—each supporting the other as we move in new and exciting directions.“
Following Chiptune’s acquisition, KADOKAWA’s seventh anime studio, Natsuno was asked whether the company shared technologies and resources with all of the group members. He replied, “Yes, absolutely. For example, one area we’re actively investing in is AI. Introducing AI into the production pipeline takes both time and financial resources—something we’re in a position to provide. One of our business divisions alone employs hundreds of engineers, including specialists in AI. This gives us the internal capacity to properly evaluate how to apply the technology in meaningful, effective ways.
What I want for Kadokawa is to serve as a kind of guardian for our creators, using technology to support and protect their creative freedom, not replace it.“
KADOKAWA previously shared its aims to introduce AI into anime production in its FY2023–2027 Mid-term Management Plan (Page 7). It spoke of “AI-based production support” that would feed into the strengthening of its group’s production studios. Other Kadokawa AI investments include Mantra, a manga translation tool that uses image recognition and language processing to convert Japanese to multiple languages.
At the time, KADOKAWA cited the massive challenge of closing the gap between Japanese and international releases to prevent the loss of profits due to unofficial versions. In this new interview, Natsuno also spoke about how investments in technology and infrastructure have led to improvements in their book distribution. They’re reducing the rate at which bookstores return unsold titles to KADOKAWA, citing that they were down to a 26% return rate against an industry average of 40%.
While AI proves contentious to many anime fans and creators, several high-profile companies are pressing ahead with its development and use. Toei Animation recently highlighted how it aims to use AI for various animation production processes. OLM Digital is conducting an AI research project into its viability in the industry. Over 10 major anime companies have purportedly agreed to test out the findings.
Production companies like KADOKAWA say that AI is necessary to meet demand and improve working conditions — a disputed claim. Many groups say efforts would be better served by improvements to scheduling, pay, and revenue-sharing. Nevertheless, as one of the largest anime producers, making over $245 million in 2024 from its animation business alone (FY2025 report), KADOKAWA aims to go even bigger. It established the Studio Business Division in April 2025 to oversee and consolidate the processes of its 7 studios, and is pursuing more acquisitions, and increasing the number of anime it produces each year for TV, streaming, and theaters.
KADOKAWA CEO Says There Are Too Many Companies In Japan, M&A Is Urgent For Industry Stability
As part of its expansion, KADOKAWA also plans to continue its M&A (mergers and acquisitions) strategy, stating that further consolidation in Japan is “urgent” due to the large number of small and medium enterprises (SMEs). Natsuno lamented their numbers, saying they often remain small, can’t utilize their full potential, and worse still, many are family-owned, generally lacking the ambition to expand or go global. He says that joining the KADOKAWA group offers studios stability as it can handle the non-creative, laborious tasks while studios focus on creating:
“When we acquire smaller studios, they no longer need to worry about building their own sales, marketing, or HR teams—we already have that infrastructure, which will provide various back up functions for the studios,” he said. “All they need to do is focus on their core strength: creating compelling stories. To sum it up, I believe industry-wide consolidation isn’t just our goal—it’s what the industry needs right now.“
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Source: The Worldfolio
Featured image © Reki Kawahara / KADOKAWA / SAO-P Project
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