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Kaiju No. 8 the Game‘s simultaneous global launch on smartphones today serves as a test for Kaiju No. 8 anime rightsholder Toho and developer and publisher Akatsuki Games as anime games gain the attention of foreign investors.

Why it matters: Anime, media mix, and IP-based Japanese mobile games brought in ¥548 billion (US$3.57 billion) in revenue in 2023, according to a survey conducted by the Association of Japanese Animations.

• This figure accounts for one-quarter of Japan’s video game industry revenues and about one-third of revenues from all mobile games domestically.

Zoom in: Kaiju No. 8 the Game is a turn-based tactical role-playing game where the player creates teams of four characters to defeat colossal kaiju monsters.

• “The game recreates the intense battle scenes and interpersonal dynamics of the anime, while also adding original storylines and characters to expand the world of Kaiju No. 8,” the Akatsuki Games representative explained.

Catch up quick: Toho’s growing emphasis on its anime business is leading the film distributor to also invest in video games like Kaiju No. 8 the Game as a way to multiply the impact of its anime IP portfolio.

• “This project began when we were approached at the stage when Toho and Production I.G were moving forward with the anime adaptation,” an Akatsuki Games representative told Animenomics in a recent interview.

• Kaiju No. 8 first aired in 2024 with a significant marketing effort from Toho, from livestreams on X at the same time new episodes were released in Japan to integrated graphical elements on Crunchyroll.

• Kaiju No. 8’s second anime season began airing in July, helping preregistrations jump 60 percent in the two weeks leading to the game’s launch, from 1 million to 1.6 million.

Yes, but: Kaiju No. 8 the Game employs gacha mechanics as part of its gameplay, and there’s been growing concern in recent years with potential negative impacts of gacha games on young players.

• Several Japanese mobile game developers also point to last week’s end-of-service announcements by two long-running gacha games as a signal that the market for the gameplay format is in decline.

• Earlier this year, Akatsuki canceled an unrelated game with gacha mechanics just three months after launch, allegedly due to poor performance off of an expensive development budget.

The other side: “Monetization is an important element for ensuring that players can enjoy the game over the long term,” Kaiju No. 8 the Game’s developers explained. “At the same time, we believe it must be implemented with fairness and transparency.”

• “We are particularly mindful of the impact on younger players, focusing on intuitive systems and operations designed to avoid encouraging excessive reliance,” the development team added.

Go deeper: Read our full interview with the Kaiju No. 8 the Game development team at Akatsuki Games.

Kaiju No. 8 the Game is the first game that Akatsuki Games has developed for Toho and Production I.G. How did the partnership come about?

This project began when we were approached at the stage when Toho and Production I.G were moving forward with the anime adaptation. From the outset, we shared a common vision: to faithfully capture the appeal of the original work while creating new experiences unique to a game format.

Leveraging each party’s strengths and working in close collaboration, development is progressing toward the August 31 release.

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Webtoon Entertainment () announced a content deal with Disney last week, bringing around 100 new and existing Disney comics titles onto the Webtoon platform for vertically scrolling comics over the next four years.

Why it matters: One year after Webtoon Entertainment’s debut on the Nasdaq stock exchange, the digital comics company controlled by South Korean internet giant Naver is accelerating investment in Webtoon’s English-language edition to counter a decline in global readership.

• The company also announced separate content deals with San Diego-based comics publisher IDW Publishing and with Dark Horse Comics earlier this year.

By the numbers: English-language monthly active users on the Webtoon mobile app climbed 19 percent year-over-year for the second consecutive quarter, chief executive officer Junkoo Kim told shareholders on Tuesday.

• “We remain focused on driving app users, who are typically more engaged and present better monetization opportunities compared to web users,” the company said.

• Monthly active users across all Webtoon Entertainment platforms in South Korea, Japan, and other parts of the world, on the other hand, fell 7.6 percent year-over-year in the second quarter to 156.1 million.

Zoom in: While comics by independent creators remain Webtoon’s core business, the company sees content from established comics publishers as a way to draw readers to the platform, enticing new creators to join and further attract readers.

• “Our content and format are a favorite among Gen Z, and we believe we’ll see more users and engagement as we continue to grow our creator ecosystem,” chief strategy officer Yongsoo Kim told Animenomics immediately following the company’s second quarter earnings announcement.

Zoom out: Webtoon Entertainment’s Japanese platform LINE Manga, operated by local subsidiary LINE Digital Frontier, has also used the same playbook of working with established publishers to great success.

• “LINE Manga tries to include all genres and serve all populations,” LINE Digital Frontier chief growth officer Sinbae Kim told Animenomics. “We are trying to be a player with broad coverage by utilizing non-exclusive manga content.”

• LINE Digital Frontier’s working relationship with Square Enix, among other manga publishers, recently enabled Webtoon to bring Fullmetal Alchemist to the global platform in the vertically scrolling format.

Friction point: Webtoon Entertainment’s challenge with brand awareness lies in the different names the company’s platforms use in different markets.

• In its home market in South Korea, the platform is known as Naver Webtoon. In Japan, it’s LINE Manga. In the rest of the world, the platform is simply Webtoon.

What we’re watching: In its major markets, Webtoon Entertainment is increasingly tapping into screen adaptations to raise brand awareness.

• Expanding beyond Korean television and film productions, Webtoon Entertainment’s North American IP business, recently rebranded as Webtoon Productions, are working with Hollywood studios tied to director Ron Howard, actress Margot Robbie, and others to produce English-language content.

• The company is also forming anime production committees and working with Japanese and South Korean studios on more than 20 projects based on its own IPs, including Teenage Mercenary and Dark Moon: The Blood Altar.

The bottom line: “We keep innovating our product, and our IP adaptation business is growing,” chief strategy officer Yongsoo Kim said. “With these key strategies, I believe Webtoon will keep growing even further and faster.”

Go deeper: Read the interview with Webtoon Entertainment chief strategy officer Yongsoo Kim and LINE Digital Frontier chief growth officer Sinbae Kim below.

The United States is counted as part of the Rest of World segment in Webtoon Entertainment financials. What kind of trajectory can we expect from the U.S., and what are the opportunities and challenges for growing this territory into a more prominent segment in Webtoon Entertainment’s business?

Yongsoo Kim, Webtoon Entertainment chief strategy officer: While we don’t break out U.S. results or growth projections within ROW, what I can share is that Webtoon is the global leader in our category, and we’re just beginning to penetrate a massive and growing addressable market opportunity. We’re dominant in Korea, have a strong foothold in Japan as the number one app across iOS and Google Play, and in the earliest stages of a massive market opportunity in North America. This past quarter, our English-language webcomic app’s monthly active users increased 19 percent for the second consecutive quarter, showing the power and potential of our global English platform.

Webtoon content and creators are everywhere, and our influence on pop culture has never been greater. We have hits on screens and bookshelves all over the world, and our content is on Netflix, Disney+, Crunchyroll, and more, fueling the global entertainment industry.

Our content and format are a favorite among Gen Z, and we believe we’ll see more users and engagement as we continue to grow our U.S. creator ecosystem. This year, we’ve started to diversify our content in the U.S., working with leading publishers and entertainment companies to bring fan-favorite franchises to Webtoon. Just today, we announced that we’re teaming up with Disney to bring iconic titles featuring Spider-Man, The Avengers, Star Wars, Alien, and more to our mobile vertical-scroll format. We’ll have a new, dedicated Disney section on Webtoon that will make it easier than ever for fans to enter their favorite Disney universes anytime, anywhere.

As part of our collaboration, we’re also teaming up to develop original series that explore new storylines from fan-favorite universes. All of this marks the first step in a collaboration that will bring around 100 Disney comic series to our global English platform over the next four years.

By creating the best platform for every kind of creator, offering some of the best IP in the world, and continually innovating to deepen engagement, we’re excited to continue growing our U.S. business.

The term webtoon is synonymous to vertically scrolling webcomics, and your company is listed in the U.S. as Webtoon Entertainment. Is having the name Webtoon Entertainment while the product itself is also called webtoon beneficial to you as a business?

Y.S. Kim: As you’ve noticed, we keep focusing on our new brand name Webtoon. That is our statement that we’re really focusing on our growth in the global market. In Korea, everyone knows Naver; in Japan, everyone knows LINE. But, in the global market, especially in the U.S., no one knows Naver or LINE. We need to let our users know what Webtoon is by focusing on our immersive new format for users to be able to enjoy the digital storytelling platform. We also showcase how webtoons provide differentiated content and how the webtoon creation process is different.

Yes, it’ll be tough—it won’t be easy because we aren’t leveraging the existing Naver or LINE name. In the U.S. market, we go by Webtoon because we want to make it an independent brand with a new platform for a new industry. Making Webtoon a listed company last year was a meaningful first step. The IPO itself is a statement that Webtoon represents a new category and a new industry for the digital storytelling era.

Sinbae Kim, LINE Digital Frontier chief growth officer: Frankly speaking, we don’t use the word “webtoon” in Japan. Each market—whether it’s Korea, Japan, or the U.S.—has a different view of comics. In Japan, manga is considered part of the main culture, and everyone enjoys reading manga. We don’t want readers to separate webtoons from manga; we want them to accept webtoons as part of manga. That’s why we intentionally aren’t using the Webtoon brand, except as a company name.

While we aren’t using the Webtoon name with our Japanese readers and users yet, we’re also watching how the market moves. In the future, we may follow the global brand, or we may maintain our Japanese brand as is.

In my early conversations with your team, they used the term webcomics. Does Webtoon prefer that we use the term webcomics over webtoon?

Y.S. Kim: We use Webtoon as our corporate brand and corporate name, and we consider webcomics as one of the different formats of digital storytelling. Our position is that Webtoon is the top player who pioneered the webcomics industry. That’s how we view webcomics in relation to Webtoon.

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Netflix has shifted its anime strategy from creating original content to acquiring more licensed content, forcing New York-based anime production management company Qubic Pictures to shift how it finances future international anime co-productions.

Why it matters: Netflix entered the Japanese market in 2015 and made its mark with exclusive and original anime content.

• As previously reported by Animenomics, anime production studios began re-evaluating their relationships with the streaming giant after it first reported subscriber losses in 2022.

What’s happening: “They’ll still do high-quality, high-budget productions, but I think they’re doing much less now in terms of the number of projects,” Qubic Pictures chief executive officer Justin Leach said about Netflix in an interview with Animenomics.

• Despite Netflix’s anime viewership growing 11.3 percent in hours watched in the first half of 2025, anime marketing agency White Box Entertainment found that this growth isn’t being driven by exclusive titles.

The intrigue: Leach, who has been a producer of two anime projects for Netflix, says he’s considering forming a production committee for an upcoming anime project to account for the shift in how the streaming giant spends money on anime.

• “It’s actually more profitable for producers now to make a committee than it is to directly finance an anime through a major platform because you can get residuals on a production committee,” Leach explained.

• Leach acknowledges criticism of production committees, which are often accused of preventing anime creators and studios from receiving the benefits of anime’s growing international revenues, but he admits the model also has its merits.

The bigger picture: In the decade since Netflix’s entry into Japan, the number of original anime productions have declined by one-third, according to an Animenomics analysis of Association of Japanese Animations anime production data.

• Of the more than 240 television anime series that aired in Japan last year, about 45 percent were adapted from manga, 10 points higher than the 2010s average, showing increasing entrenchment of manga adaptations in the anime industry.

Go deeper: Read about Leach’s experience working with animation producers outside Japan, plus part two of his full interview (for paying subscribers), below.

In your experience, how do animation producers outside Japan who want to work with Japanese studios see anime? Are they interested in anime because it brings in new audiences? Is it a medium that they want to try to work with? Is it just a source of IPs that could become big business?

For a lot of the producers, their children love anime. COVID was a big opportunity for people to learn about anime. Some people who hadn’t watched it before were looking for something new to watch, and they stumbled across anime. Some of them have also become new fans.

Some of them can’t ignore the trends that are happening in the industry. If you go to a convention now, you can see how big and how popular anime is. Some producers have been around for a long time, and I feel like Hollywood’s going through a bit of a crisis in finding the type of content that appeals to everyone right now. Sometimes that content is very different than what they normally have produced before. More traditional companies like Disney haven’t really made much anime. This is very different from their core brand, but that’s what everyone is asking for right now.

I feel like the recent surge in popularity of anime across the world is forcing a lot of people to ask questions like “What is this all about?” “Why do people like this so much?” “We have to be a part of this.” It’s one of those trends that can’t be ignored, and I think everyone’s trying to figure out the best way to embrace it and make it part of the new type of content that’s being created out there—shows like Blue Eye Samurai or Castlevania.

There’s also the anime-adjacent category that’s becoming popular, which is finding an audience generally leaning towards adult animation. Arcane and Spider-Verse are examples. I’m not sure what’s causing the change exactly, but it seems to be that's what the younger generation really, really want right now. I feel lucky because that’s what I’ve been doing most of my life, but I also have a lot of friends who work in the western animation industry, and they’ve been having a lot of trouble right now because of this correction that's happening. It’s been tough for a lot of people.

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New York-based Qubic Pictures is pioneering new models of international anime co-productions, bringing Japanese studios’ production processes to the forefront of high-value productions like Star Wars: Visions and Leviathan.

Why it matters: Anime studios have long done animation service work for foreign clients, and the entry of global streaming video platforms into Japan—beginning with Netflix in 2015—prompted renewed interest in co-productions.

• Qubic Pictures, a production management company was founded in 2018 and with multiple Netflix titles under its belt, has played a key role in ensuring the voices of anime studios and creators are heard in its co-productions.

What they’re saying: “Japan has this amazing history of making animation for decades, and they have a very well-established system,” chief executive officer Justin Leach told Animenomics in an interview. “We try to embrace all of that and make something that’s authentic and faithful to Japanese animation.”

• “What we’re hoping is that if we can find the right formula and the right way to work together, we can expand the viewership of anime to a wider audience.” Leach explained.

Zoom in: Leach sees his company as an apparatus that can attach to any Japanese anime studio and facilitate communication with producers abroad.

• Qubic Pictures provided Disney-owned Lucasfilm with cultural assistance and consulting when working with anime studios in Japan for the first and upcoming third season of Star Wars: Visions.

What’s next: “Lately, we have been trying a side-by-side approach: we respect the creators, we respect how Japan works, and we trust the way that they like to work,” Leach said in reference to his company’s latest project for Netflix, Leviathan, based on Scott Westerfeld’s award-winning young adult science fiction novel.

• Qubic Pictures also has an upcoming project that brings in both western and Japanese talents to create a story together, Leach teased.

Go deeper: Read about Leach’s impressions of working with animator Shinya Ohira in the third season of Star Wars: Visions, plus part one of his full interview (for paying subscribers), below.

You were recently at the Annecy International Animation Film Festival, where you screened Shinya Ohira’s Black from Star Wars: Visions. How was the reception among the audience?

One of the things that makes that short stand out is the team of people that worked on it. They are considered legendary if you follow sakuga or are really into Japanese animation. For the people who were familiar with those animators, it was such a joy for them to see it. In the audience, I saw people who were gasping in disbelief.

There was sort of a palpable feeling after the screening completed at the opening ceremony where people were just processing and needed time to think about what they just saw. I think it had a very impactful premiere, and I was really happy to be able to witness that.

I know you have a strong personal interest in not just Star Wars, but also in Japanese animation. For you personally, what was special about Ohira’s work as an exhibition of Japanese animation at Annecy?

Ohira-san is someone that I’ve always looked up to as a creator. I worked on Kill Bill when I was at Production I.G many years ago and got to see some of his work there. He also worked on Innocence, another film that I worked on. I remember thinking to myself, “Who is this person? His work looks so different than everybody else’s.” He’s on this other plane of existence in terms of animation, creation, and the way that he uses expressive movement. It’s often very rough and not clean and refined, yet it evokes this feeling or emotion.

I’ll never forget the moment when David Production said, “We’re considering Shinya Ohira for this project.” I was like, “Oh my gosh, I’ve been a longtime fan.” I think he’s one of the national treasures of animation. I think most animators recognize this, and his work is truly exceptional. It was such an honor to be able to work with him and see the team that he assembled and all these legendary animators that I’ve been a fan of for a long time.

Did he say anything about being at Annecy and what it was like interacting with other animators?

Fans would come up to him all the time and say, “I love your work. I’m a huge fan.” I think it was an opportunity for him to meet some of those people that admire his work.

Even though Annecy is not a festival where people think of anime, it’s a very important one for animation. Masaaki Yuasa spent a lot of time there—he was there this year. There is a lot of Japanese presence, so Japan is a part of the community. From my experience, Annecy is the world’s best animation festival that brings all the animation lovers together in this magical city, so I think it’s really important for creators in Japan to participate and engage with the community at Annecy. Hopefully, they’ll return and start to develop a reputation within the festival like Yuasa-san has.

For Ohira-san, I think it was probably just a great way for him to see how his work is seen outside Japan and the type of impact it has on other people. I think he was able to experience that there.

Shinya Ohira’s Black will be exhibited for a second time at Anime NYC this month ahead of its October debut with Star Wars: Visions Volume 3.

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A common refrain among manga readers in the United States is that the print format is still preferable over digital releases for reading, but this hasn’t prevented multiple new manga apps by major Japanese publishers and distributors from sprouting in the country in the last few years.

Why it matters: Manga reading behavior in the U.S. stands in contrast to behavior in Japan, where digital manga sales have surpassed print sales for years.

Driving the story: Japanese mobile phone network operator NTT Docomo, which launched Manga Mirai in the U.S. in March, recognizes this gap between the two manga markets.

• What they’re saying: “We believe that both digital and non-digital formats have their own merits, and that fans should feel free to enjoy them both as they see fit,” NTT Docomo representatives told Animenomics in an interview.

The bigger picture: As I wrote in ICv2 earlier this year, digital manga’s growth in Japan is slowing, and the manga industry must look elsewhere for growth. Publishers and distributors are now hedging the future by expanding their digital footprint abroad.

Zoom in: For NTT Docomo, growth doesn’t simply come from creating a typical digital manga platform. It’s also capitalizing on the latest trends in the medium.

• “As vertical formats continue to gain popularity—especially among mobile-first users—it is essential for us to cater to new readership demographics,” NTT Docomo said about its inclusion of both vertical comics (webtoons) and horizontal comics (manga) on the same platform.

Go deeper: Read our full interview with NTT Docomo about its Manga Mirai platform below.

NTT Docomo is better known as a mobile phone network operator and not commonly known outside Japan. What is the motivation for your entry into the international digital manga market with Manga Mirai?

NTT Docomo has a long-standing foundation in Japan’s telecommunications sector, built upon a strong customer base and advanced technology. In addition to this, we have amassed extensive experience and achievements in the content business. Leveraging these strengths, our primary motivation for entering the global digital manga market—particularly in the United States—is to serve as the bridge that connects Japan’s rich manga culture with global fans and the brilliant creators who bring these manga to life. We see this a new opportunity for business growth.

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Colorful Stage! The Movie: A Miku Who Can’t Sing achieved a milestone in April when the anime film opened in theaters in the United States. It earned nearly US$1 million more on its opening weekend in the U.S. than it did in Japan three months earlier—US$2.83 million versus ¥307 million (US$1.98 million).

The film also sold as many tickets on opening weekend in the U.S. as it did in Japan, according to an estimate by anime marketing agency White Box Entertainment.

Colorful Stage! The Movie’s eponymous main character, the virtual idol Hatsune Miku, has long had broad appeal outside Japan as the mascot character of the Vocaloid singing synthesizer software, created by Sapporo-based Crypton Future Media.

Miku’s success as an anime, however, bodes well for the future of CyberAgent, one of Japan’s top digital advertising companies and the leader of the production committee that funded the film’s production.

As previously reported by Animenomics, CyberAgent last year formed an anime and IP business division in an effort to diversify away from advertising.

In the past year, the number of stories reported by this newsletter about CyberAgent demonstrates the company’s rapid progress in the anime industry, including acquiring a visual novel development studio, recruiting a veteran producer to lead a new anime studio subsidiary, and relaunching its San Francisco-based marketing subsidiary.

After Colorful Stage! The Movie, CyberAgent successfully aired an original anime series, Apocalypse Hotel, in April. It will also debut next week a highly-anticipated adaptation of critically-acclaimed manga The Summer Hikaru Died, licensed from publishing giant Kadokawa.

In light of these developments, Animenomics interviewed CyberAgent to learn more about its IP strategy.

CyberAgent recently reported very favorable earnings results for the Media & IP business. Sales in 2Q 2025 are up 14.4 percent year-over-year, and four of the last five quarters have reported an operating profit. What role does CyberAgent’s anime investments play in this loss-to-profit turnaround?

At CyberAgent, we are planning to build a system that will maximize the potential of the anime industry—which is projected to exceed ¥9 trillion yen (US$60 billion) in market size by 20301—and to seamlessly establish and monetize IPs from their source.

We are also working on developing a multifaceted strategy centered around anime by maximizing synergies with CyberAgent’s peripheral businesses, such as through the investment in and production of anime and through merchandise planning and sales.

Although we’ve just taken our first step into the anime industry, we expect it to become one of our company’s major future earnings. We are also hoping to contribute to the overall development of the anime industry as a whole.

In the last several years, CyberAgent has started investing in anime productions as the lead manager or co-lead manager. There are major adaptations like The Summer Hikaru Died and original IPs like Apocalypse Hotel. How does CyberAgent identify IPs that are good candidates for anime?

Since we are still in the early stages of establishing our anime division, our hope is to be involved in something that can really contribute to developing the anime industry further while working together with other industry players.

CyberAgent has an affiliate company, Cygames, that has been very successful with its Umamusume: Pretty Derby IP in both gaming and anime. What lessons have you been able to gain from that success that CyberAgent can apply in the future?

While prioritizing user satisfaction, we spare no effort or expense in making a high quality end product. When localizing anime and IP, we ensure that we maintain the property’s unique worldview, and to localize it appropriately for each respective country it’s released in. Although we haven’t been involved with many localization projects yet, we plan on continuing to accumulate knowledge and building on what we know.

CyberAgent has been building up its anime production capabilities with units like Animation AI Lab, Tokyo Anime Artifacts, and CA Soa.2 At the same time, there is concern that there isn’t enough human resources to keep producing more anime. What approaches is CyberAgent taking to address this concern?

In the anime production process, there are a number of problems such as an overreliance on overseas contractors and long working hours. At CyberAgent, we are determined to solve these problems in a way that only CyberAgent can—such as with the help of technology—and to create an environment where creators can continue to produce unique and wonderful works of art.

Earlier this year, CyberAgent America was relaunched with a focus on global anime marketing, partnering with companies like X Corp. Japan and MyAnimeList. What kind of challenges with anime marketing today are you trying to tackle?

Through international partnerships with various media and online platforms, CyberAgent intends to take on the challenge of formulating a comprehensive global marketing strategy. We also aim to promote each property in a way specific to each region without compromising the anime’s unique branding and worldview, which we believe is one of its biggest strengths.

In March, CyberAgent launched the English-language version of ANIME FREAKS, a website that reports anime news. However, around the world, many of the youngest anime fans now receive news directly from social media. Why is it important for CyberAgent to still create a direct-to-consumer website for anime news reports? What role does ANIME FREAKS play among the existing fan-operated English-language outlets that report on anime?

Our goal is to deliver anime information quickly by publishing articles simultaneously both in Japan and abroad. We will also publish original articles, such as reports on the impact of Japanese anime on overseas fans and covering anime conventions across the world. Furthermore, CA America will publish columns utilizing quantitative data from social media and anime review sites, and from qualitative data such as user comments. In addition to our website, ANIME FREAKS will post actively on social media. We hope to provide information from a variety of angles that only ANIME FREAKS can offer.

CyberAgent also plans to create other language versions of ANIME FREAKS in Korean, Simplified and Traditional Chinese, Thai, Spanish, Portuguese, and French. Do these reflect what CyberAgent believes are the emerging markets for the anime industry around the world?

The popularity of different series varies by country.

ANIME FREAKS is a news media outlet that aims to both provide the latest news in the world of anime and manga as well as opportunities for anime fans from around the world to discover new series. To this end, we plan to expand supported languages.

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Tonari Animation CEO talks anime funding, training, AI

Tonari Animation is a 2D digital animation studio headquartered in the United States, has a branch office in Japan, and has a staff of animators located around the world. Animenomics met with CEO Jarrett Martin to discuss the company’s operations and current trends in the anime industry in this two-part interview.

Read part one of the interview

Richardson Handjaja: A report in a Japanese business magazine a few months ago said that there’s a de facto tier system in the anime industry where large studios have the ability to charge higher prices than smaller specialty studios. Do you see those challenges as a subcontractor?

Jarrett Martin: As a subcontractor, we’re usually just entitled to the animation budget, not the production budget. We’re also not entitled to any kind of profit sharing. If you’re the primary contractor, you get the animation budget and the production budget, and, as far as I'm aware, you get some residuals off of the intellectual property and any sales that happen later.

A studio that has the entirety of the budget can determine how they want to allocate their resources. Most studios will allocate around the same budget proportion to animation, then that animation budget will be passed down the line to subcontractors. I don’t think the pay rates per cut differ that much between the primary studio and subcontracting studios. The animators are making around the same amount of money in either case.

The only time they aren’t making as much money is when the subcontractor is a budget option, and Tonari Animation is not a budget option studio. We are on par with all other Japanese anime studios in price, but there are studios in Southeast Asia that will charge one quarter to one-tenth the price, and they become the budget option studios. In their cases, they’re making way, way, way less.

Handjaja: Obviously, with Southeast Asia being a lower labor cost region, they have the ability to charge lower prices. Many people who are interested in the anime industry come from some of those regions—developing countries that are non-U.S., non-Europe—where these kinds of wages could be a step up from their local incomes.

Martin: Yes, that’s right.

Handjaja: Do you see a lot of applicants from those countries and regions?

Martin: I can tell you the breakdown of our animation staff at Tonari Animation. We have about 40 people in the U.S., 40 people in Southeast Asia, and then there are around 100 people that are like the only person in their country that’s working in anime. And it’s scattered among 32 different countries.

There’s a lot of interest from every country on Earth by artists who work in Japanese anime. It’s just how they acquired the anime is going to be a different story, but basically everyone’s seen the same shows growing up. I know that animators in Africa likely got bootleg low resolution DVDs or something, and that's how they watched anime. Or bootleg VHS releases and stuff like that. But the impact is still the same. They still fell in love with anime.

Handjaja: I used to live in Malaysia myself and saw a lot of those bootleg anime DVDs, which are obviously not real licensed products. They were either rips of fan subs or illegal copies of authorized subs.

Martin: Exactly.

Handjaja: You’ve said in the past that you provide experiences for people to become a director, do some storyboard work, or even handle episode direction. How do you create those opportunities, especially for foreigners and non Japanese people?

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Tonari Animation CEO: Foreign animators a boon for anime industry

Tonari Animation is a 2D digital animation studio headquartered in the United States, has a branch office in Japan, and has a staff of animators located around the world. Animenomics met with CEO Jarrett Martin to discuss the company’s operations and current trends in the anime industry in this two-part interview.

Richardson Handjaja: Thanks for taking the time to talk with Animenomics. I want to start by asking how you got started in the anime industry because I understand you’re an animator. I’d also love to hear more about how you decided to create Tonari Animation.

Jarrett Martin: I started off as a YouTuber, and my YouTube channel’s focus was teaching people about how to make anime. Even though I hadn’t been in the industry yet, I studied it on my own through friends I met online and through what I gathered on the Internet. There really wasn’t a resource for English-speaking animators at the time to learn how to get into the anime industry, so my goal for the channel was to get me into the industry by teaching people about it. I had to be very careful that I was teaching it properly, so it gave me a lot of motivation to really know what I was talking about. I’ve since pulled a lot of those videos down. Now that I’ve been in the industry for five years, I found that the information was okay, but I know I can do better, so now I’m rebuilding all that stuff.

Striving for Animation was the online group where I met my mentors that taught me about how to make anime. It started off as a Skype group that would meet daily and draw together and study art. That group was founded and advertised entirely on 4chan. On 4chan, there’s an art thread called /ic/, which is Artwork and Critique. This guy named Chi was advertising it when I was first in college and really getting into animation. I was posting my artwork on /ic/ because I just didn’t have any good artists around me to critique my work. I got a lot of good feedback, and that’s where I found Striving for Animation. A few people from that group actually got into the anime industry through the traditional route—learn Japanese, get an art degree, go to Japan, go to senmon gakko [vocational college], start at a studio as a doga-man [in-between animator], and then work your way up to key animation. He followed that route, was successful, and taught me and other people in the group.

After that, I pushed for the group to grow because there are way more people that need this information, so I advocated for the group to go to Discord. After the Discord server got too big, we realized that we needed videos because we were teaching the same thing over and over every time a new person comes in, so we made this YouTube channel to catalog what were teaching. It ended up blowing up, and that’s when I started Sakuga Foundry, which was an online forum for artists who wanted to get into animation. They would have a place where we could store resources and have professionals talking to people that are interested.

This huge community spawned a client base, naturally, and we started getting clients coming into the Discord server. I had a bunch of artists in my circle that were interested in getting into anime, so I wanted to make a studio and put the opportunity in my own hands, instead of hoping a studio will hire me someday, and then also help provide opportunities for other artists. I think I’ve gotten a lot of criticism by some members of that community that have since left. They think that artists shouldn’t be trying to make a business, that artists should work for a company and not be too capitalistic. But I think if there isn’t anyone doing what I’m doing, then there are going to be a lot of artists that are going to miss out on opportunities to get into the anime industry. I know now how hard it is for Japanese studios to hire foreigners, so having an anime company that specializes in hiring foreigners I think is a boon to the industry, not a negative.

Handjaja: Do you see any hesitancy from the Japanese side when hiring a company that’s run by a foreigner as a subcontractor?

Martin: Absolutely not. It’s actually the exact opposite. Basically, they’re all excited and happy. We’ve been given gifts from every major studio that’s in our client base. We’ve been very welcomed because the industry needs people.

Handjaja: That’s good to hear. From what I’ve seen, many of the overseas subcontractor studios are obviously run by foreigners, but there aren’t many studios in Japan that are run by non-Japanese people.

Martin: There are actually three—Sola Digital, Tonari Animation, and D’Art Shtajio. Sola, as far as I’m aware, is based in Tokyo and Los Angeles. D’Art Shtajio is strictly Tokyo, and then Tonari Animation is U.S. company with a Japanese branch.

Handjaja: Did you simultaneously set up in the U.S. and in Japan at the same time, or did you start in the U.S. first before branching out into Japan?

Martin: When I started Tonari Animation, I thought coming to Japan was kind of impossible. It was kind of a dream. I started Tonari Animation right when the pandemic started. Japan shut down, and there was no chance of actually coming here and setting up, so I just set up remotely instead. The entire company was founded on this cloud system. Everyone’s working asynchronously in different time zones. They can work from home anywhere in the world. It was always a goal of mine to eventually get to Japan and open a physical office, which I’ve since done, but it wasn’t easy.

Handjaja: Were there any the regulatory challenges that you had to face by being a studio in the cloud?

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