Japan’s “Soft Power”

The close association of Japanese cinema with animation is not merely due to  Western prejudice. Of the 20 highest-grossing Japanese films worldwide, 19 are anime; within Japan, 17 of the top 20 titles are animes. 

It is somewhat ironic that the award-winning director and actor Takeshi Kitano is better known to Western audiences for his namesake game show Takeshi’s Castle than for his far more introspective live-action films, like the immensely successful Battle Royal (2001), which saw similar international success during the same period. Japan’s rise in the entertainment industry was also supported by its video game consoles, by the likes of Nintendo, Sony, and Sega.

This development unfolded during a critical period: In Japan, the 1990s are often referred to as the “Lost Decade” – a time of stagnation and deflation, the effects of which still resonate today. 

However, the entertainment sector became an unexpected success story. Japan suddenly exerted a form of global soft power that assuaged earlier fears of the competing “Japan Inc.” in the U.S. and Germany. The Japanese government eagerly embraced the concept under the unofficial slogan “Cool Japan,” to enhance the country’s international image – not least in East Asia, where Japan’s imperial past still casts a long shadow. Early on, anime culture began to engage with Japan’s own history, such as the lingering trauma of Hiroshima, while simultaneously using it to connect with countries whose relations with Japan had been less than good. As a result, anime conventions and fan communities surged both in Asia and the West, fostering a greater appreciation for Japanese culture in the process.

Aggressive Expansion

More recently, the Chinese market has become an increasingly important player in the marketing of Japanese animated films, resulting in a market that is almost the same size as Japan’s domestic market. Streaming platforms like Crunchyroll and Netflix have been pivotal in driving this growth, distributing anime titles worldwide and making them accessible to new audiences.

For years, the industry struggled with piracy, as distribution problems ‘forced’ international fans to download series from illegal websites. The advent of streaming services has largely solved this issue, and innovations in artificial intelligence are improving the industry even further.

The financial gains from anime production are considerable: In 2021, the Association of Japanese Animations estimated the market’s size in Japan at $19.2 billion – compared to just $3 billion in 1990. Projections suggest this figure could reach $47.14 billion by 2028. Globally, there are 800 million anime fans; by the end of the decade, this number is expected to exceed 1 billion.

Miyazaki’s Worst Fear

Surprisingly, the anime industry remains relatively small: Around 6,000 animators are employed in Japan, and the industry is estimated to employ between 15,000 and 20,000 people in total. Most studios employ fewer than five staff members; only 22 companies in Japan have over 100 employees. A 2023 study revealed that half of all industry employees work over 225 hours per month. Despite the international success, the work of an animator is still considered poorly paid and most taxing.

This presents a significant risk for the future of the anime industry. The new, vibrant anime culture of the late 80s and 90s is largely a thing of the past, and the creators of that era are now either middle-aged or of advanced age. 

Miyazaki’s latest film – The Boy and the Heron – was a box-office hit, but it was no longer the highest-grossing Japanese film of that year (2023). Studio Ghibli has been acquired by Nippon Television Holdings, and Makoto Shinkai (CoMix Waves Films) has surpassed Miyazaki with films like Your Name and Suzume, grossing $300 to $400 million each – partly because anime has now become a global phenomenon.

Other studios maintain a more conservative approach, as they focus on broader appeal and are less keen on experimentation. Creative freedom has become more restricted compared to earlier years, and the industry is increasingly characterised by remakes and sequels, rather than innovation. It is this soulless mass production, Miyazaki’s worst fear, which now has been realised. 

Statement

Japanese anime culture has evolved from a niche interest to a global phenomenon – but this success comes at a cost. Commercial pressures and precarious working conditions are crowding out its once-revolutionary creativity, leading anime to become the very cliché Western critics once believed it to be. Early anime addressed social problems like loneliness, escapism, and how fear can cripple the individual. If anime abandons that legacy, it loses what made it unique and successful in the first place –following in the footsteps of its Western counterpart.