In its latest financial briefing for fiscal year April 1, 2024 to March 31, 2025, Toei Animation vaunted its successful ventures and outlined future plans, including a scheme to fold AI technology into many facets of its animation production pipeline. The veteran Japanese studio saw increases in both sales and profits, driven by the global success of anime properties including Slam Dunk, Gegege no Kitaro, One Piece and Dragon Ball. Film sales increased 7.2% to 37.3 billion yen / ~$256.7M USD (profit: 10.38B, up 51.9%), while licensing sales were up 27.5% to 50.6B (profit: 25.9B, + 36.8%).
However, the section of the briefing receiving the most attention is the reveal of a major joint venture plan to incorporate artificial intelligence into Toei Animation’s productions, through its investment in Japanese tech firm Preferred Networks Inc. The document reads: “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.”
Proposed AI applications to animation production processes include:
- Storyboarding — “AI sued to generate simple layouts and shooting of the storyboards”
- Coloring & Color Spec — “AI used to specify colors and automatically correct colors”
- In-betweening — “AI used to automatically correct line drawings and generate in-between”
- Backgrounds — “AI used to generate backgrounds from a photo”
This tech exploration comes as Japan’s anime industry continues to grapple with a growing labor shortage, as trained artists are turned off or burned out by low paying, exploitative labor practices that has gone as far as to draw attention from the United Nations Human Rights Council, which released a report in 2024 highlighting the stark contrast between the global profitability of the $20 billion-dollar anime business and the treatment of the artists who create it.
In an industry where some 30% of animators are freelancers who are not entitled to minimum pay protections, Japan’s animation workers can struggle to get by on as little as $200 a month. In 2024, the Japan Research Institute estimated there are only about 6,000 animators in the country, as talents seek better pay overseas or quit the business altogether.
While the Preferred Networks joint venture is in the works, Toei Animation’s immediate plan for continued growth is tied to expanding further into global markets through a three-pillar strategy, led by its export business tied to library title sales, acquiring a global distribution network and forming partnerships across Europe, Asia and the Middle East for local productions aimed at local audiences. Projects under the third pillar include:
- China — Web series hit Spicy Candy has racked up more than 160 million views and major tie-in deals, while a remake of Hana no Ko Lunlun (with Tencent Video) is launching this year.
- Korea — An adaption of the hugely popular Naver Webtoon manga Gosu (more than 1.4 billion views globally) is in production with partners Studio N and Studio Mir.
- France — Kids’ dark fantasy-adventure Le College Noir, produced with up-and-coming Paris outfit Studio La Cachette (Star Wars: Visions – The Spy Dancer, Genndy Tartakovsky’s Primal). Future development is under consideration.
- Saudi Arabia —Asateer2, produced in collaboration with Manga Production, was broadcast on TV Tokyo from November 2024.
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