Although the Association of Japanese Animations (AJA) reported new record sales for the anime industry, many studios continue to struggle with significant financial difficulties – how can this contradiction be explained?
Studios are not benefiting from the boom
According to the latest AJA report, the anime industry has reached a new record: in 2023 it achieved sales of 3.35 trillion yen (around 19.7 billion euros), an increase of 14% compared to the previous year.
Despite this impressive total, 32% of all anime studios are reporting losses – a clear sign of the growing gap between the industry’s strong sales and the precarious situation of many production companies.
Only 13% of total sales, around 427.2 billion yen (2.5 billion euros), flowed back directly to the animation studios. The reason for this is the system of production committees, in which large companies take over the financing.
Although this model reduces the risk for investors – since a twelve-part anime series now costs around 300 to 600 million yen (around 1.8 to 3.6 million euros) – it disadvantages the studios because the committees retain the rights and pocket the profits from licenses, streaming and merchandise.
Gap between studios is growing
Smaller anime studios are usually not part of these committees and therefore have to make do with one-off production fees. Although these cover ongoing production costs, they do not ensure sustainable income.
According to Naoki Ishikawa, deputy secretary general of AJA, changing this situation is difficult because studios have little bargaining power and are unlikely to negotiate better terms.
While 45% of production companies reported increasing profits in 2023, the growing gap between successful and financially struggling studios continues to raise questions about the future viability of the industry.
According to the latest AJA survey from 2020, there were 811 anime studios in Japan, around 100 of which play key roles in planning and production. These established companies benefit from higher budgets and sometimes participate in committees themselves in order to achieve long-term profits.
Smaller studios with disadvantages
A prime example in this regard is Studio MAPPA, which has fully invested in Chainsaw Man, but smaller or newer studios can only dream of this. Even a seat on production committees seems out of reach for many, as they often lack the track record or resources to do so.
This results in them having to accept low production budgets to remain competitive and also giving up the possibility of intellectual property rights, further limiting their revenue potential.
As a result, these studios operate on razor-thin profit margins, making it difficult for them to invest in better equipment, training or wages.
No money for employees
The situation of the employees has often been criticized – and since it is not the production committees but the studios that pay their wages, these will continue to remain low unless enough income is distributed.
According to the report, it is difficult for many studios to increase animator salaries or invest in long-term growth without going bankrupt themselves.
Numerous production companies are increasingly relying on outsourcing, i.e. outsourcing tasks to external studios, in order to meet increasing production requirements.
However, since this order chain generates only small profits, many suppliers operate with sometimes heavy losses – a vicious circle in which the weakest links in the industry bear the greatest burden.
Exploitative working conditions
Amid this financial pressure, the impact is particularly serious for animators, as according to the United Nations (UN) report on the Japanese animation industry from May 2024, they earn an average of 1.5 million yen (about 8,850 euros) per year at entry-level, which is barely enough to survive.
As a result, around 25% of animators leave the industry within just four years and 68% within eight years, according to the Japan Research Institute. This brain drain has led to a lack of technical expertise that is hindering the production of quality animation and is increasingly moving offshore to meet production needs.
To make matters worse, almost 31% of those working in the animation industry work as freelancers. Because they do not enjoy labor protection, many of them are subjected to excessive working hours and unfair contract conditions.
Government addresses problems
Despite working time reforms, in 2022, 10% of animators still reported working more than 260 hours per month, which is about 8 to 9 hours per day – not counting weekends or holidays.
After all, the Japanese government has recognized the problems and, as part of its “Cool Japan” strategy, wants to promote the anime industry by supporting young creators, combating unfair trading practices and improving cooperation with law enforcement authorities to combat piracy – so that the industry’s market volume can increase to 20 trillion yen by 2033.
Anime fans can only hope that these steps will help solve the deep-rooted problems in the production committee system in the long term. However, fundamental reforms would be crucial to reduce income differences, improve working conditions and specifically strengthen smaller studios.
