KADOKAWA anime producers Takuya Yoshioka and Maki Mihara spoke to The Television (owned by KADOKAWA) about their experience working on My Happy Marriage and the series’ global success. They were then asked for their thoughts on Japan’s domestic and overseas expansion prospects, given the imports of Chinese and Korean anime into Japan. They were also asked what they thought about those countries’ production capabilities catching up to Japan’s.
Yoshioka answered:
“I believe that in any visual work, there are elements that can only be created based on the cultural background of the country or region and the values that have been cultivated over a long period of time, and that there is animation that can only be created with the sensibility and nature born in Japan.“
“That is why I believe that it is the responsibility of video makers to protect the unique video expression method called ‘anime’ born in this country and its culture, protect and develop the production environment and functions, and continue to produce anime with continuity so that people involved in anime can be properly enriched.“
Yoshioka continued, “In that sense, I am concerned that, rather than many anime works being produced overseas and coming into Japan, as is the case with other industries, if things can be made overseas with cheap costs and labor, investment will be directed there, leading to the decline of domestic production capacity and industry, and that in Japan, where economic growth is stagnating, talented creators and human resources will flow overseas.“
“I strongly feel that it is time to reconsider the model of producing and consuming large amounts of work just for the next temporary sales and for companies with capital to come together and invest their capital properly, aiming for truly ‘sustainable’ anime production.
If the environment for anime production in Japan becomes more stable and is established on a solid foundation for growth, there is great potential for new expressions to emerge through the entry of overseas studios, and I think there are many positive elements for the development of animation,” Yoshioka concluded. Mihara said that Japanese-style anime has changed the perception of what anime is and looks forward to seeing different cultures expressed through the Japanese production method.
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Just this month, Nikkei reported on a brain drain of animators — this time not overseas, but to the gaming industry, which KADOKAWA Chief of Anime Takeshi Kikuchi described as 30 years ahead of the anime industry in globalization last October. The animation industry faces regular high turnover, stemming from unlivable wages, long working hours, and harassment, making it less viable for graduates. Due to anime production’s gruelling schedules, animators can’t receive proper corrections, and veterans lack the time to pass down their skills, representing another brain drain.
Meanwhile, Korea and China, long the cheap destination for Japanese anime outsourcing, are developing their capabilities. Korea’s Studio PPURI received widespread acclaim for its opening video for Solo Leveling Season 1 last year, while Chinese anime quality is quickly growing, now regularly imported to Japan and then overseas.
Aniplex is playing a major role in this trend, recently bringing over titles like Dragon Raja, Heaven Official’s Blessing, Link Click, and the upcoming To Be Hero X series. Meanwhile, Crunchyroll, its joint venture with Sony Pictures Entertainment, streams all of these and additional titles like The Daily Life of the Immortal King, Psychic Princess, and The King’s Avatar, which it just quietly added in late February.
Chinese production companies like NetEase, Tencent, and Bilibili are also frequently listed in Japanese anime production committees, accumulating know-how. Tencent recently also upped its equity in KADOKAWA as part of a capital and business alliance, with previous investment aimed at co-producing anime titles. Both were production committee members of Ishura, I’m Quitting Heroing, Negative Positive Angler, Overtake!, and the extremely lucrative Delicious in Dungeon. While Tencent’s stake is unknown, Delicious in Dungeon‘s anime adaptation alone made KADOKAWA nearly $20 million from April to December 2024.
Meanwhile, the Chinese government has implemented policies to increase its domestic animation industry, increasing its competitiveness in both quality and wages. A 2023 JETRO report estimated that even despite reductions in foreign animation entering China from 2019, owing greatly to protectionist policies, China’s animation industry still enjoyed double-digit growth until at least 2022. JETRO credits this to the increase in the number of domestically produced animation works and improvement in quality.
In January 2024, NAFCA affiliate and veteran animation director Terumi Nishii (Jujutsu Kaisen 0, JoJo’s Bizarre Adventure) predicted that Chinese budgets would continue to grow, their involvement in production committees would increase, and “high-quality anime based on Japanese works will be produced in China,” adding, “Japan is riding on the golden losing pattern of the past 30 years” and that Chinese animators were more “humbly willing to listen.“
You only need to look to very recently for a testament to China’s animation development. Released on January 29, the Chinese film Ne Zha 2 just broke the record for the highest-grossing animated film of all time, exceeding $2 billion. It’s also enjoying a successful run in overseas markets like the U.S., grossing nearly $18 million less than a month after release (via The Numbers).
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Commentators Weigh In on How to Achieve Sustainability in the Anime Industry
Despite Yoshioka’s words, many have differing opinions of what “sustainable” anime production looks like. Groups like NAFCA have called for increased return of revenues to the field — the on-site staff making the anime. Since most anime studios are taking jobs merely to survive, most can’t escape the threat of impending insolvency, arguably making this necessary.
While the production committee system rewards companies that can make investments, thus securing the copyright to a work, NAFCA advocates that studios should receive a mandatory percentage of this copyright. Jitsugyo no Nihon Sha estimated in December 2024 that just over 10% of domestic revenues from anime copyrights went to anime studios.
Meanwhile, large production companies say they can create sustainable production by having studios consolidated into their group, either through acquisitions or by forming new ones. These conglomerates are far more experienced with handling time-consuming and specialist activities that anime studios aren’t, like accounting and invoicing, meaning significant cost savings compared to if a studio were to implement these things. By taking on this load, these conglomerates could allow their studios to become self-sustaining faster and begin to invest in co-productions itself, near-guaranteeing their future.
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Other parties, like Studio Pierrot and Colorido, have spoken about the riskier and more difficult move of building up a reputation for strong anime production and gaining multiple income streams, and then using this credibility to secure bank loans. In at least Pierrot’s case, copyrights held by the studio were put as collateral if they defaulted on these loans.
Studio Colorido gave a seminar mentioning debt (bank) financing in 2018, interestingly highlighting how to market oneself to banks and that banks don’t like companies that will grow too quickly: it means they can’t make money from the interest on the loans.
“Banks make profits by continuing to receive interest for the period during which they lend money. Therefore, a good customer for a bank is not a company that grows rapidly, but a company that continues to make repayments stably for the long term,” said accountant and studio advisor, Hiroshi Kase. ‘Therefore, when an anime production company applies for a loan, it is necessary to consider the balance of the company’s overall business and devise a way to “present” the submitted business plan,‘ CGWorld added, a little deviously.
You can also read a 2024 lecture from Makoto Kimura, former MAPPA producer and head of the rights department, who outlined another form of debt financing to secure funding: Studios with strong track records can secure funds through presales contracts from licensees like streaming services or TV broadcasters, which Buzz Capital says are “usually provided in installments at various milestones through the production process, and sometimes for a period of time after the production is completed.“
With this guarantee of future funding in place, studios can then go to companies like the Cool Japan Fund’s Japan Contents Factory fund (JCF) and receive bridge financing — a short-term loan used to actually produce the anime. This loan will be paid back through the fees paid by the licensees. Kimura says, “Few people on the production side today have the knowledge required for such funding” and laments that the JCF did not catch on. Nevertheless, he believes the need for JCF and other forms of bridge financing will increase in the future.
Source: The Television
Featured image: ©Tappei Nagatsuki,KADOKAWA/Re:ZERO3 PARTNERS, © Akumi Agitogi, Tsukiho Tsukioka/KADOKAWA/My Happy Ｍarriage Partners
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