VFX Japan's animation industry witnesses the lowest drop in a decade in 2020 -

Japan’s animation industry witnesses the lowest drop in a decade in 2020

Despite the huge success of many animated features produced in Japan last year, the country’s animation production fell 1.8 per cent in 2020 amid the global pandemic — the local industry’s first drop in decades, a report from credit research firm Teikoku Databank showed. The figures stand at ¥251.1 billion ($2.3 billion) in 2020, down from a record ¥255.7 billion in 2019 (per company average: ¥831 million [$7.586M]) — a 1.8 per cent decline overall.

In the movie business, the industry had smash-hit Demon Slayer: Kimetsu no Yaiba: The Movie: Mugen Train, which became the highest-grossing film in Japanese box-office history with more than ¥40 billion ($365 million) in revenue. Among other hit movies was Violet Evergarden: The Movie, a Kyoto Animation film that some of the victims of the deadly arson attack at a studio of the company two years ago had been working on. It garnered a massive ¥2B ($19 million) domestically.

In spite of these successes, 48.6 per cent of the 300 animation studios surveyed by Teikoku reported a fall in sales in 2020 (31.6 per cent reported a rise); 37.7 percent of these companies incurred losses, 29.5 per cent said their profits dropped and 31.1 per cent said their profits increased.

While the industry looks to recover from the production delays and theatrical revenue losses due to Covid-19, Teikoku’s report also notes the challenges of competition from China. The outlook for the Japanese animation industry appears difficult, with competition likely to intensify from Chinese animation firms, the research firm mentioned. Chinese companies are offering higher salaries to hire Japanese talent and gaining Japanese production skills by taking stakes in Japanese studios. Their animation quality is improving in recent years with advanced facilities, Teikoku Databank reported.