Overview of Recent Developments in the Anime Industry
- Sony’s acquisition of 10% of Kadokawa shares influences the anime industry landscape.
- Studio Orange’s agreement with TOHO signals potential shifts in market strategies, likely motivated by Sony’s growing dominion.
- The anime industry’s stability is jeopardized by escalating international political tensions.
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Recent events have sparked significant discussions surrounding the anime industry, particularly with Sony’s strategic investment in Kadokawa, acquiring 10% of its shares. This move positions Sony as a crucial stakeholder, granting it not only a share of Kadokawa’s profits but also a vote in pivotal corporate decisions. The extent of Sony’s shareholding enhances its influence amongst other key players in the market.
Shortly after news of the acquisition broke, Studio Orange announced a deal with TOHO, where TOHO intends to acquire 19.7% of Studio Orange’s shares in January. This timely announcement may reflect a competitive response to Sony’s increasing influence over the anime landscape, although TOHO has been actively acquiring shares across various studios. In 2024 alone, TOHO secured 6.09% of CoMix Wave Films, the studio behind many of Makoto Shinkai’s acclaimed films, along with full ownership of GKIDS, and Science SARU, known for popular titles from Masaaki Yuasa.
If TOHO’s recent maneuvers are in reaction to Sony’s market presence, it indicates a strategic effort not only to maintain market balance but also to position itself as a formidable competitor against Sony’s formidable presence instigated by their prior acquisition of Crunchyroll. Historically, a significant shift towards oligopolization can ensue when a company capitalizes on advantages within a lucrative market, which is a concern for the overall health of the anime industry.
The Largest Anime Complex
Sony’s acquisition of Kadokawa has received considerable coverage in gaming news outlets, though its ramifications for the anime sector may be even more profound. Owning Crunchyroll, the world’s leading anime streaming service, puts Sony in a prime position to leverage popular titles. Despite this ownership, Sony historically lacked extensive rights to numerous Intellectual Properties (IPs) beyond original productions developed through Aniplex and subsidiaries.
Given that many successful anime are adaptations of manga or novels with pre-existing fanbases, the industry sees considerable potential for any successful series to connect with a wider audience through anime adaptation. Presently, while no formal agreements with major manga publisher Shueisha exist, Sony is working collaboratively with Shueisha on notable adaptations such as Kaguya-sama, Promised Neverland, and others through studios like CloverWorks and A-1 Pictures, indicating a cooperative relationship.
Is the Anime Industry Meeting Expectations?
The COVID-19 pandemic catalyzed substantial growth in the anime industry, paralleling trends seen across other entertainment sectors. An estimated 44% of Gen Z Americans now engage with anime, while international revenue outpaced domestic earnings for the first time in 2023, according to the Association of Japanese Animations.
However, industry expert Hiromichi Matsuda noted that this growth is not fully aligned with the bold ambitions of Japanese stakeholders. The US represented a sizeable 7.1% of the global anime market in 2023, trailed closely by China at 6.1%, both regions projected to experience further growth. Concerns have been raised by veteran industry figures about the possibility of China “overtaking”Japan in anime production due to increased Chinese involvement in anime IP, particularly within gaming collaborations. However, current data does not support a definitive claim that China’s production capabilities surpass Japan’s.
Insights from prominent anime creators reveal concerns about the sustainability of this growth. Yoshiyuki Tomino, the creator of Gundam, predicts a potential decline in the anime boom within the next five to six years, a sentiment echoed by Justin Sevakis, CEO of Media OCD and AnimEigo, who highlights a potential bubble in anime content production:
I still have two meetings to go this AX, but so far my takeaways are… 1. Anime content bubble is probably gonna burst soon, way too many shows and nobody can handle it, not fans nor industry 2. Anime merch sales have fallen off a cliff, especially figures Everyone’s kinda 😟 — Justin Sevakis (@worldofcrap) July 7, 2024
Moreover, Crunchyroll, the premier anime streaming service, appears to face management challenges, an alarming sign for the industry’s current trajectory.
The Role of International Politics
In any industry, the trajectory of growth is influenced not only by current trends but also by geopolitical dynamics. The United States and China are emerging as central figures within the anime sector. How this international rivalry evolves can profoundly affect anime companies’ strategic positions—creating scenarios where companies may have to determine alliances amidst geopolitical frictions.
The delicate interplay between anime production and international policies has become increasingly apparent. In recent years, concerns over China’s state censorship of animation content raised alarm, yet these discussions seem to have diminished, suggesting a pragmatic approach by Chinese companies navigating regulatory landscapes similar to those imposed by major corporations like Amazon.
Presently, the primary concern for Japanese anime creators in China revolves around intellectual property rights. Japan’s government persistently presses China to enhance protections for these rights, a move reinforced by notable legal victories for foreign companies in Chinese courts. In the backdrop, the ongoing conflict involving Russia and Ukraine has disrupted global supply chains, impacting both the gaming and anime sectors significantly.
Challenges in Drawing Conclusions
While predicting the future remains a challenging endeavor, indications suggest that the anime industry may soon confront significant hurdles. Observations imply that escalating expectations from stakeholders may not align with the industry’s ability to deliver, thereby raising the prospect of an imminent bubble burst.
Although it may not be definitive yet, industry insiders extensively believe that the bar has been set too high. If the anticipated decline begins to materialize, the prospects for the expansive anime complexes being established by companies like Sony and TOHO could be severely impacted.
In summary, the anime industry is currently at a crossroads, navigating between unprecedented growth trajectories and the looming shadows of potential oversaturation. Observers will need to remain vigilant as these dynamics unfold.
Sources: Sony, Studio Orange, ANN
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