In its recent financial report covering the fiscal year from April 1, 2024, to March 31, 2025, Toei Animation proudly highlighted its successful initiatives and laid out ambitious plans for the future. A significant focus of this briefing was the intention to integrate artificial intelligence (AI) into various aspects of its animation production process. The well-established Japanese animation studio has experienced a notable increase in both revenue and profits, largely fueled by the worldwide popularity of its anime franchises such as Slam Dunk, Gegege no Kitaro, One Piece, and Dragon Ball.
Toei Animation reported a 7.2% increase in film sales, which reached approximately 37.3 billion yen (about $256.7 million USD), with profits soaring to 10.38 billion yen, reflecting a remarkable growth of 51.9%. Meanwhile, licensing sales surged by 27.5%, totaling 50.6 billion yen, with profits climbing to 25.9 billion yen, which represents a 36.8% increase. This financial success underscores the studio’s strong position in the animation market.
However, the most intriguing part of the briefing was the announcement of a significant joint venture aimed at leveraging AI technology in Toei Animation’s productions. This collaboration will be with Preferred Networks Inc., a Japanese tech company specializing in AI solutions. The briefing document stated, “With an eye on launching a joint venture, we [Toei Animation] will seek to co-develop new business opportunities and improve the efficiency and quality of our production, capitalizing on synergies between AI and animation production technologies.”
The potential applications of AI within the animation production pipeline are varied and promising. Some of the proposed uses include:
- Storyboarding: Utilizing AI to create basic layouts and streamline the storyboard process.
- Coloring and Color Specification: Employing AI to determine color palettes and automatically adjust colors for consistency.
- In-Betweening: Using AI to refine line drawings and generate transitional frames between key animations.
- Background Generation: Implementing AI to create backgrounds based on photographs, enhancing visual storytelling.
This exploration of AI technology comes at a crucial time, as Japan’s anime industry faces a mounting labor shortage. Many skilled artists are disillusioned by the industry’s low wages and exploitative working conditions, which have even drawn the attention of the United Nations Human Rights Council. A report released in 2024 highlighted the stark disparity between the anime industry’s substantial global profits—valued at around $20 billion—and the poor treatment of the artists who contribute to its success.
In this challenging environment, it is estimated that approximately 30% of animators work as freelancers and lack access to minimum wage protections. Many find it difficult to survive on just $200 a month, which has led to a concerning trend where talented individuals are either seeking better opportunities abroad or leaving the industry altogether. The Japan Research Institute estimated that as of 2024, there are only about 6,000 animators remaining in the country, indicating a pressing need for change within the workforce.
While the joint venture with Preferred Networks is still in the development stage, Toei Animation’s immediate strategy for growth focuses on expanding its presence in international markets. This strategy is built on three key pillars: enhancing its export business through library title sales, establishing a global distribution network, and forming partnerships across Europe, Asia, and the Middle East to create localized productions that resonate with regional audiences.
One of the exciting projects under this growth strategy is in China, where the web series Spicy Candy has garnered over 160 million views and secured significant partnership deals. Additionally, a remake of Hana no Ko Lunlun, produced in collaboration with Tencent Video, is set to launch this year, further solidifying Toei Animation’s foothold in the Chinese market.
In South Korea, an adaptation of the immensely popular Naver Webtoon manga Gosu, which has accumulated more than 1.4 billion views globally, is currently in production through partnerships with Studio N and Studio Mir. This collaboration highlights Toei Animation’s commitment to tapping into successful narratives and formats that resonate with contemporary audiences.
In France, the studio is working on Le College Noir, a dark fantasy-adventure targeted at children. This project, developed in collaboration with the innovative Paris-based Studio La Cachette—known for its work on Star Wars: Visions – The Spy Dancer and Genndy Tartakovsky’s Primal—demonstrates Toei Animation’s intent to expand its creative horizons and explore diverse storytelling styles.
In the Middle East, Toei Animation is also involved in producing Asateer2, which was broadcast on TV Tokyo starting in November 2024 in partnership with Manga Production. This venture reflects the studio’s strategy of engaging with local cultures and narratives, ensuring that their content resonates well with regional audiences.
The integration of AI technology into Toei Animation’s production processes is poised to revolutionize the way the studio operates, potentially addressing some of the labor shortages and challenges faced by the industry. By automating certain aspects of production, Toei Animation aims to improve efficiency, reduce costs, and enhance the overall quality of its animation. This move not only positions the studio to remain competitive in a rapidly evolving market but also opens up new avenues for creative expression and innovation.
As Toei Animation continues to expand its global reach and embrace technological advancements, the future looks promising for both the studio and the anime industry as a whole. The combination of AI-driven solutions and strategic international partnerships is likely to yield exciting new projects that captivate audiences around the world, ensuring that Toei Animation remains a key player in the global animation landscape.
