The anime industry is undergoing significant changes, with a notable number of production companies facing financial distress. In the first nine months of 2025, a total of eight anime production companies have either shut down or declared bankruptcy. This trend highlights a growing concern within the industry, as the number of closures is on track to match the record high of 16 seen in 2018.
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The financial research firm Teikoku Databank published a report on November 5, highlighting that two anime production companies had gone bankrupt with debts exceeding 10 million yen (at least US$65,127). Additionally, six other companies had either suspended operations or dissolved. This marks the third consecutive year of increasing closures, with the total number of company exits expected to reach levels similar to the peak seen in 2018, which also recorded eight closures or bankruptcies between January and September, culminating in 16 for the year. In comparison, there were eight total closures in 2023 and 10 in 2024.
The closures include specialized studios that act as secondary contractors or subcontractors, but the most significant impact is seen in anime production companies that are “prime contractors with gross contracts.” These companies have the capability to directly undertake and complete production. According to the report, approximately half of the production companies that exited the market in the past five years fall into this category.
For instance, EKACHI EPILKA, known for handling gross contracts for notable anime series, declared bankruptcy this July. Similarly, 5 Inc., which provided 3DCGI works for several popular series, and Cloud Hearts, responsible for animation production in various projects, both filed for bankruptcy in June and December 2024, respectively.
The industry’s challenges are multifaceted. The sudden increase in orders post-COVID-19 led to a surge in demand that the supply capacity could not meet. To compensate, overseas production companies were outsourced, but the cost of outsourcing increased due to the weak yen, further straining profitability. Despite the growing demand for anime, particularly from overseas markets, production companies are finding themselves in a “busy but unprofitable” state. Rising production and labor costs are outpacing revenue growth, particularly affecting small- and medium-sized production companies without stable revenue bases like intellectual property (IP) revenue.
The report also notes that many anime series scheduled for this fall or this year have been postponed, exacerbating the industry’s manpower shortage. Notable series that have been delayed include The Warrior Princess and the Barbaric King, Witch Hat Atelier, and Go for It, Nakamura!.
Efforts are being made to address these issues, with companies showing a willingness to accommodate increases in production fees. However, many small- and medium-sized production companies, often involved as secondary contractors, struggle with low profitability and financial instability.
The Association of Japanese Animations (AJA), the industry group led by anime production companies, presented a summary of its Anime Industry Report for this year on October 30. The report revealed that the global anime market reached a record level of 3.8407 trillion yen (about US$25.1 billion) in 2024. This included 1.6705 trillion yen (about US$10.9 billion) in the domestic market and 2.1702 trillion yen (about US$14.1 billion) overseas.
The overall global anime market grew by 14.8% last year—the second highest annual increase after 2019’s 15.3%. While the domestic market grew by 2.8%, the overseas market saw a significant increase of 26%. 2024 marked the third year in which the overseas market surpassed the domestic market, following 2020 during the COVID-19 pandemic and 2023.
Estimated revenues for the anime production side alone grew by 9.1% to its highest-ever level at 466.2 billion yen (about US$3.025 billion). Domestic revenues increased by 6.7% to 347.4 billion yen (about US$2.254 billion), while overseas revenue rose by 16.6% to 118.8 billion yen (US$770.6 million).
Masahiro Hasegawa, the editor-in-chief for AJA’s Anime Industry Report 2025, explained that the lower annual increase in revenues on the production side is due to a time lag of a few years before revenues from certain sources, such as overseas streaming, are reflected in the production revenues.
News Source: Animenewsnetwork.com
