As the San Diego Comic-Con approaches, it’s set to showcase a significant array of Asian content, signaling a growing interest in this sector. Meanwhile, two of Japan’s major conglomerates are making noteworthy investments in the realm of Japanese animation, which has rapidly become a cornerstone of the country’s entertainment landscape.
Marubeni Corporation, originally established in sectors like cereals, chemicals, and paper, has evolved into a trading powerhouse and ranks as Japan’s 13th largest company. The firm is now turning its attention to the flourishing markets of manga (Japanese comics) and anime (animated series and films) through a new collaboration with Shogakukan, one of Japan’s prominent publishing houses.
In a similar vein, Mizuho Securities, part of the Mizuho keiretsu—a group of companies often working collaboratively—announced the launch of an animation film fund this month. The brokerage plans to gather investments from institutional investors and affluent individuals, starting from JPY300 million (approximately $200,000) each, with a goal to amass $15 million by the end of the year.
The Japanese animation industry is currently experiencing remarkable success. Iconic titles such as “Doraemon” from Shogakukan and Shin-Ei Animation, “Demon Slayer” by Shuiesha and Ufotable, as well as long-standing favorites like “Detective Conan” and “One Piece,” have evolved into formidable global franchises. Additionally, recent animated films such as Studio Ghibli’s “The Boy and the Heron” and CoMix Wave-Toho’s “Suzume” have demonstrated the potential to achieve impressive box office results, surpassing the $100 million mark in individual markets.
Mizuho’s initiative involves a partnership with Questry, a blockchain startup, and Royalty Bank. Together, they plan to invest in a select number of new Japanese animation projects each year, with investment tranches reaching up to $5 million at a time.
Historically, institutional funds played a significant role in the Japanese entertainment sector in the early 2000s; however, they have since been overshadowed by the production committee system. This system comprises a coalition of companies related to the entertainment industry, including advertising giants like Dentsu and Hakuhodo, which collectively assume financial risks for various projects.
While the production committee approach provides a level of stability, it has faced criticism for its sluggish decision-making processes, which can deter international collaborations and keep production budgets relatively low. The special purpose vehicles often established by these committees are designed to mitigate financial risks, but they can also hinder reinvestment in the sector.
Recently, however, a variety of factors have begun to challenge the risk-averse nature of these committees. The increasing global success of Japanese anime, coupled with Sony’s acquisition and revitalization of the niche anime streaming service Crunchyroll, alongside Netflix’s entry as a significant investor in the industry, has contributed to this shift.
The Japanese government, led by Prime Minister Kishida Fumio, is also eager to elevate Japanese entertainment to a status comparable to that of K-pop and Korean television dramas. In his recent “New Capitalism” initiatives, Kishida proclaimed, “Anime, manga, music and other artistic content are assets we ought to be proud of.” He proposed that Japan’s entertainment sector could achieve an export profile rivaling that of steel and semiconductors.
Prominent filmmakers, such as Kore-eda Hirokazu, are advocating for a modernization of the Japanese film industry. They are pushing for the establishment of state-backed production funds and incentives akin to those offered by France’s Centre Nationale de la Cinematographie, as well as a restructuring of traditional hierarchies prevalent in the industry.
According to a report from Bloomberg, Shuichiro Tomihari, head of Mizuho’s global investment banking division, expressed his aspiration to “create opportunities for third-party investment and accelerate the revitalization of the animation industry.”
Newly established funds could address two significant issues currently plaguing the industry: a shortage of skilled animators—largely due to low wages and demanding work hours that dissuade newcomers—and production budgets that are dwarfed by those of major American and Chinese competitors. Notably, Sony is also launching a training academy to help cultivate talent in this field.
Reports indicate that backlogs in production can extend up to two to three years, prompting leading studios to contemplate outsourcing more work to overseas locations like the Philippines or Vietnam. However, many within the industry are reluctant to compromise on the tradition of hand-drawn animation. Despite this, change is on the horizon, whether the industry is prepared or not.
The challenges posed by international competitors and AI-assisted production, combined with the current opportunities for Japanese anime to diversify into new markets and formats, are acting as catalysts for transformation that will necessitate substantial financial backing.
Marubeni’s foray into animation is relatively conventional, having established MAG.NET Corp. as a joint venture with Shogakukan and Forest LinX, its paper products subsidiary. Still, it marks the first time in 168 years that this industrial titan has ventured into the entertainment realm.
The strategic reasoning behind Marubeni’s investment aligns with the growing international demand for Japanese content. In 2022, overseas sales of Japanese cultural products were estimated at JPY4.7 trillion (around $2.9 billion). The increasing popularity of Japanese manga and anime has surged, partly fueled by the pandemic, which heightened interest in stay-at-home entertainment, as well as proactive distribution efforts from major international distributors.
Marubeni has identified existing weaknesses in the distribution landscape: “The lack of direct distribution networks and retail outlets means that appealing content cannot reach fans globally, resulting in missed opportunities. This situation has also led to a rise in counterfeit products, emphasizing the necessity for a system that guarantees the distribution of legitimate items.”
In this context, Shogakukan is responsible for ensuring that MAG.NET is well-stocked with products, while Marubeni and Forest LinX aim to broaden the array of offerings utilizing manga and anime, as well as enhance international distribution, including the establishment of retail outlets.
Additionally, other financial maneuvers may also be underway. Recently, Phillip Securities in Singapore announced plans to raise over $2 million through the sale of digital securities for a Japanese live-action film titled “Treasure Island,” based on a novel by Shindo Junjo and featuring actor Tsumabuki Satoshi.
In mid-June, private equity powerhouse Blackstone revealed a $1.7 billion tender offer for Japan’s Infocom, a leading player in the digital comics market, with its Mecha Comic subsidiary recognized as a frontrunner among Japanese women aged 30 and above.
