Is There An “Anime Bubble” on the Verge of Bursting?

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Summary

  • Sony acquired 10% Kadokawa shares, impacting anime industry stakeholders.
  • Studio Orange’s TOHO deal is likely a response to Sony’s market influence.
  • Anime industry’s future uncertainty due to international political tensions.

As a seasoned anime enthusiast who has been following this vibrant world since my teenage years, I must say that the current state of the anime industry leaves me both excited and concerned. Excited because the quality and diversity of content being produced are unprecedented, but concerned about the unrealistic expectations that seem to be building up among the big players.

My first encounter with anime was through a grainy VHS tape of Dragon Ball Z, and since then, I’ve witnessed its evolution from niche entertainment to a global phenomenon. The collaborations between Japanese studios and international partners are a testament to the power of this medium to bridge cultures and connect people across borders.

However, as someone who has seen bubbles burst in the tech industry, I can’t help but feel a sense of unease. The anime industry is not immune to market forces, and it seems we might be witnessing a bubble that could burst soon. It’s like a giant mecha, built with passion and skill, but if its pilots (the studios) overestimate its capabilities, it could come crashing down.

On a lighter note, let’s not forget the irony here: we have anime complexes being built by companies while some series are still struggling to find their footing due to intellectual property issues. It’s like building a mecha factory when you can barely afford a toy robot!

In conclusion, while it’s hard to predict the future, I believe it’s crucial for the industry to manage expectations and focus on sustainable growth. The anime industry has come a long way, and I hope we can all enjoy its continued evolution without the fear of a sudden crash. After all, we wouldn’t want our beloved mecha to go down in flames, would we?

As a long-time anime enthusiast with decades of experience in the industry, I find the recent news about Sony acquiring a significant portion of Kadokawa shares particularly intriguing. With my extensive background in this field, I can see that this move will significantly impact the landscape of the anime industry.

Sony’s newfound stake in Kadokawa means that they will now have a say in the decisions made by one of Japan’s most prominent production companies. This newfound influence will give Sony a portion of the profits generated by Kadokawa, which I believe will ultimately lead to more high-quality anime productions and potentially even better distribution deals for fans worldwide.

Furthermore, as someone who has witnessed the evolution of the industry over the years, I understand that having a strong voice among stakeholders is crucial. The more shares you own, the more influence you have, and this acquisition will undoubtedly give Sony a stronger voice in shaping the future of anime.

In conclusion, as an avid fan and observer of the anime industry, I am excited to see what the future holds for Kadokawa and Sony’s partnership. I believe that their collaboration has the potential to create amazing anime content and bring even more joy to fans across the globe.

A few days following the revelation of the acquisition, Studio Orange disclosed that TOHO intends to purchase 19.7% of its shares in January. Although it appears that this move could be a direct reaction to the Sony-Kadokawa deal, which may have affected ongoing talks, TOHO has been buying stocks from numerous studios as reported by ANN. In the year 2024, the distribution conglomerate obtained 6.09% of CoMix Wave Films (known for Makoto Shinkai’s films) and a full 100% of GKIDS, who distributed many of Shinkai’s movies (as well as Ghibli titles in the US), and also bought Science SARU, home to several works by Masaaki Yuasa.

Given that TOHO’s recent deals could be a reaction to Sony’s dominance, it seems they’re not directly addressing the Kadokawa deal, but rather positioning themselves since Sony took over Crunchyroll and established a strong presence in the anime industry. As previously mentioned, when one company gains an edge in a lucrative market, others tend to follow suit. Perhaps TOHO is aiming to prevent Sony from monopolizing the anime market entirely. However, this competitive race can unfortunately lead to (additional) oligopolization, which isn’t beneficial for any industry long-term.

The Largest Anime Complex

As an onlooker, I’ve noticed that the news about Sony acquiring Kadokawa has been making waves across game media outlets. However, the potential implications in the anime industry might prove to be more profound than in the gaming sector. Sony, with its global dominance over anime-centric streaming services like Crunchyroll, hasn’t traditionally held many intellectual properties (apart from original productions by Aniplex and other affiliates). Yet, the acquisition of Kadokawa could significantly change this landscape.

In the anime world, many successful series are based on pre-existing manga or novels with dedicated fanbases. These adaptations broaden the series’ reach to a larger audience. Although Sony hasn’t yet struck deals like this with Shueisha (the publisher behind Shonen Jump and Young Jump), they are gaining influence over Kadokawa properties instead. Kadokawa is known for owning popular titles such as Sword Art Online and Mushoku Tensei, with their biggest hits now primarily being light novels.

It’s worth mentioning that although Sony hasn’t struck any agreements similar to the one with Shueisha, it appears that they’ve been collaborating closely with the publisher. This collaboration has resulted in the animation of series like Kaguya-sama, Promised Neverland, Elusive Samurai, Spy x Family, Shadows House, and Mashle (all produced by either A-1 Pictures or CloverWorks), which suggests a harmonious rather than strained relationship between these entities.

Is the Anime Industry Living Up to Expectations?

As a dedicated anime fan, I’ve noticed an incredible surge in the anime industry during these unprecedented times, much like other sectors of entertainment. With many of us spending more time indoors due to the pandemic, we found ourselves exploring new realms, including genres we might not have ventured into otherwise.

Interestingly, recent studies show that a whopping 44% of Gen Z Americans are now anime enthusiasts! Moreover, data from the Association of Japanese Animations (AJA) reveals that international revenue outweighed domestic earnings in the anime industry as far back as 2023.

However, Hiromichi Matsuda, author of AJA’s industry report, shares a somewhat cautious perspective. To him, the growth of the industry is not keeping pace with the ambitions of Japanese players within this field.

It’s not just American consumers who are contributing to the growth of international markets; China also plays a significant role. In 2023, China accounted for approximately 6.1% of the global anime market, while the US held about 7.1%. Both countries are expected to see further growth in their anime markets in the coming years. Interestingly, some Japanese anime industry veterans predict that China could surpass the US in terms of influence, particularly in areas like anime intellectual property, especially within gaming. However, it’s important to note that the data does not yet support the claim that China has taken over the production side of the anime market.

It appears that experts across the anime industry are voicing concerns about an impending bubble. In 2023, Yoshiyuki Tomino, the creator of Gundam, predicted that the anime boom might start to wane within five to six years. This isn’t unique to anime, as he believes creative industries may experience a downturn in general. Similarly, Justin Sevakis, CEO of Media OCD and AnimEigo, seems to share this viewpoint.

As a long-time anime enthusiast and loyal Crunchyroll subscriber, I find it disconcerting that the largest anime streaming service globally could be experiencing mismanagement issues. This potential crisis makes me question the sustainability of the industry’s rapid growth. Over the years, I have seen numerous beloved anime franchises rise and fall, but Crunchyroll has always been a constant source of entertainment for me. The idea that the company may be struggling raises concerns about the future of my favorite series and the overall health of the anime streaming market. I hope that Crunchyroll can navigate through this difficult time and continue to provide high-quality content to fans like me who eagerly await each new season.

International Politics Matters Too

Just as every sector evolves based on its current state and potential growth, the anime industry is no exception. While the American market has long been a significant player in pushing the anime industry to new heights, it’s essential to acknowledge that other regions are also contributing to its expansion. Two major players on the global stage, the United States and China, are now playing crucial roles within the anime industry. However, these two nations have found themselves increasingly at odds with one another, and some analysts liken their competitive dynamic to a modern-day version of the Cold War.

In other words, given the escalating conflicts and sanctions, if anime production companies were forced to align themselves with one particular side, which one do you think they might choose? This question isn’t straightforward, as different Japanese entities might have varying viewpoints (the severity of the situation could influence their decisions). Ultimately, whatever decision is made, its effects could be unforeseeable.

A few years ago, when anime started trending in China, there were many articles claiming how state censorship could harm the industry. While the CCP still maintains guidelines on which kind of content is accepted, and series might go through some edits before airing (as they did in the US back in the 1990s), these kinds of vocal articles on Chinese censorship seem rarer now (though it’s not hard to find scholars studying it), and government censorship is not the only kind of censorship that takes place in China. What likely happened here is a simple case of when a market gets too big to be ignored, the industry just doesn’t ignore it. Not only that but, to some extent, having to adapt to CCP’s guidelines is not that different from having to adapt to Amazon’s policies in order to guarantee a manga won’t be banned from the stores.

In China today, the primary challenge for Japanese anime appears not to be censorship per se, but rather ensuring copyright protection. Both Japan and other nations have been advocating for stronger intellectual property protections in China. Notably, in 2024, Pokemon successfully won a copyright lawsuit against an alleged Chinese counterfeit – a rare victory for foreign companies in such cases in China. This case garnered significant attention due to the rarity of such outcomes. The Chinese government has been working on addressing this issue, but it’s important to note that developed countries have been urging developing countries to enforce stricter copyright laws since the 1990s, so this isn’t unique to China. Tensions around this topic were evident during the Doha Development Round in 2001.

The effects of the Russia-Ukraine conflict aren’t limited to choosing a side; they extend far beyond that. This conflict has disrupted global supply chains and economies, which in turn impacts industries such as gaming and anime. As the dynamics between America and China develop, these tensions could influence the anime industry in ways we can’t foresee now. For instance, a significant portion of current anime production involves collaboration with Chinese animators or studios.

It’s Hard to Conclude Anything

Based on my personal experience and observations, it can be challenging to accurately predict future events, especially when it comes to financial markets or industries that seem excessively popular and hyped. I recall a time in my life when I witnessed the dot-com bubble bursting, and the aftermath was quite chaotic. It left many investors, including myself, with significant losses.

Given this past experience, I find it plausible that we might be witnessing another bubble in the making, perhaps within the entertainment industry. The hype surrounding certain sectors can sometimes feel overinflated, and history has shown us that such situations rarely end well. However, it’s essential to remember that not every bubble will inevitably burst, and there are always exceptions to the rule.

In my opinion, it’s crucial to approach any investment or market trend with caution and a healthy dose of skepticism. I believe in doing thorough research and considering various perspectives before making decisions. After all, it’s much better to be prepared for potential pitfalls than to be caught off guard by an unexpected collapse.

As someone who has been a dedicated fan of anime for over two decades, I have seen the industry evolve significantly from its humble beginnings to the global phenomenon it is today. However, based on my observations and experiences, it appears that the anime industry may struggle to meet the ever-increasing expectations of major players like Sony and Toho.

While it’s true that no industry can grow indefinitely without eventually showing signs of maturity or decline, I fear that the anime industry could be reaching a critical juncture. The rapid expansion of anime complexes by these big players seems reminiscent of a bubble that may soon burst, leaving many question marks about the future of these ventures.

In my opinion, the anime industry’s success was built on its ability to cater to niche audiences and maintain a unique identity. As it grows in size and influence, the risk of diluting this core value increases. If the major players continue down their current path, they may find themselves struggling to connect with their audience in the same authentic way that made anime great in the first place.

In conclusion, while I am excited about the potential growth of the anime industry, I also believe that it is essential for the major players to approach expansion with caution and respect for the roots that have made anime so popular. If they can find a balance between growth and preservation, they may be able to continue delivering quality content that meets the expectations of fans around the world.

It’s challenging to assert definitively that the anime industry is experiencing a bubble, but it appears that industry insiders believe the standards have become excessively high, making it unlikely for the industry to fulfill the possibly inflated anticipations.

Sources: Sony, Studio Orange, ANN

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2025-01-02 20:38