TOKYO – Eight Japanese anime production companies have either declared bankruptcy or ceased operations between January and September 2025, according to a recent report by financial research firm Teikoku Databank. This marks the third consecutive year that the number of studios exiting the market during this period has increased, highlighting a growing financial strain within a globally booming industry.
The closures include two companies that filed for bankruptcy with debts exceeding 10 million yen (approximately US$65,127), and six others that suspended or dissolved business operations. If this trend continues, 2025 could see a total number of closures on par with 2018, which holds the record for the most studio exits in a single year at 16.
The Paradox of a “Profitless Boom”
Despite the alarming rate of studio closures, the broader anime market has never been more successful. The Japanese anime industry reached a record high of USD 25 billion in 2024, a 14.8% increase from the previous year. In 2023, the anime production market alone hit a record 339.02 billion yen (approximately 2.36 billion USD). This creates a paradoxical situation that Teikoku Databank describes as a “profitless boom” for many production studios.
Why Studios Struggle Amidst Success
The core issue lies in the financial structure of the anime industry, particularly the prevalent production committee system.
- Production Committee System: In this model, investors (such as distributors, music companies, and broadcasters) fund an anime project and retain control of the valuable intellectual property (IP) rights. Animation studios often act as contractors, receiving a one-time production fee rather than a share of royalties from successful series or merchandise.
- Rising Costs and Stagnant Wages: Studios are grappling with soaring production costs, including rising labor costs for in-demand animators, and the depreciation of the yen, which significantly increases the price of overseas outsourcing. However, the flawed financial structure makes it difficult for studios to pass these rising costs onto the final price or to raise wages for animators, leading to a critical labor shortage and high turnover.
- Overwhelmed Production Capacity: A post-COVID surge in orders has overwhelmed the production capacity of many studios. While demand is high, the inability to manage increased costs and secure fair revenue streams traps studios in a cycle of “profitless prosperity.”
Impact on the Industry and Notable Closures
The closures are not limited to small subcontractors. Teikoku Databank notes that approximately half of the studios that have exited the market in the past five years were “prime contractors” or “gross contractors,” meaning they were capable of leading and completing anime productions.
Notable examples of studios that have recently faced difficulties include:
- EKACHI EPILKA: Known for titles like Demon Lord, Retry!, declared bankruptcy in July.
- 5 Inc. (Studio5): A 3DCGI studio, which worked on Heavenly Delusion, filed for bankruptcy in June.
- Cloud Hearts: Responsible for titles such as Whisper Me a Love Song (episodes 1-10), declared bankruptcy in December 2024 and was infamous for production delays.
The financial health of studios across the industry is declining, with 60% of prime contractors reporting worsened performance in fiscal year 2024. This strain is becoming visible to consumers, as manpower shortages have led to widely reported postponements for new anime titles, including those scheduled for the Fall 2025 season.
The Path Forward: Urgent Need for Systemic Change
Experts, including Teikoku Databank, emphasize the urgent need for systemic support measures to ensure the sustainable growth of the anime industry. These measures include establishing a fairer business environment and fostering human resources.
The Association of Japanese Animations (AJA) reported that while the total market value reached ¥3.3465 trillion in 2023, production studios received only ¥427.2 billion, or just 13% of the total market scale. A January 2024 Japan Research Institute (JRI) report further highlighted this disparity, noting studios earn only 6% of overseas sales revenue and 16% of domestic sales. Without significant changes to revenue distribution and working conditions, the “profitless boom” threatens to undermine the very foundations of Japan’s globally celebrated anime industry.
