The 2024 Anime Industry Report, published in December by the Association of Japanese Animations (AJA), offers a critical snapshot of the industry’s evolving landscape.
For only the second time ever, international revenue has exceeded domestic earnings, accounting for 51.5% of the industry’s total market value, a significant and concerning milestone for Japan’s renowned entertainment medium.
While the anime industry saw a record-breaking 14.3% growth to reach 3.3465 trillion yen ($21.27 billion), this milestone hints at far more than financial success, it signals a transformation that threatens to undermine anime’s core identity.
The initial graph from AJA illustrates the market value and trends of the anime industry from 2002 to 2023 while the second graph below highlights the domestic market (solid line) and the overseas market (dotted line).
Anime’s global appeal has always stemmed from its distinct Japanese cultural narratives, bold artistic styles, and unique storytelling techniques. Unlike Western animation, which has traditionally been seen as family-friendly fare aimed at children, Japan has long embraced animation as a versatile medium for adult-centric storytelling, leisure, pleasure and escapism.
However, the rising dominance of international markets brings with it a demand to tailor content to fit foreign sensibilities. This trend has already resulted in censorship and creative compromises that erode the authenticity and creative spirit that made anime a global phenomenon.
A stark example of this shift can be seen in the third season of Re:Zero – Starting Life in Another World. The adaptations character designer openly admitted that they altered the character designs of two characers, Liliana and Capella.
These changes made their outfits far less revealing and suggestive to align with so-called “global standards,” as Western audiences equate small, petite characters with real-life children, thus making their revealing and sensual attires morally unsuitable for global demographics.
If these pressures continue unchecked, anime risks losing its cultural uniqueness, transforming from a medium defined by Japanese creators and traditions into one molded by Western market demands. This shift undermines anime’s role as a platform for Japan’s storytelling heritage and threatens to dilute its unique voice on the global stage.
As international revenue grows, Japan’s anime industry faces a pivotal challenge: balancing global success with preserving its identity. Without resistance to cultural homogenization, anime could become another sanitized entertainment product, stripped of the vibrant creativity that defines it.
The international anime boom is a double-edged sword. On one hand, it highlights anime’s growing global popularity. On the other, it signals a troubling transformation driven by market pressures rather than creative passion and authenticity.
This mirrors the trajectory of the video game industry, which was once rooted in innovation, fun, and passion. As gaming became a lucrative industry, corporations flooded in, oversaturating the market in pursuit of profit. New developers were being thrusted in to replace seasoned veterans, because they were cheaper, these new hires lack creative ambition and only care about collecting paychecks and pushing their ideology.
Pseudo demands for diversity and global standards promoting “equality” reshaped the landscape, overshadowing core gameplay and storytelling elements.
The rise of Environment, Social, and Governance (ESG) fundamentals and Diversity, Equity, and Inclusion (DEI) initiatives shifted priorities. Games increasingly became tools for promoting social ideologies rather than simply sources of entertainment. Many consumers rejected these changes, viewing them as forced adjustments driven by corporate interests rather than player needs.
This culminated in 2024 being a challenging year for AAA titles, marked by commercial failures and widespread industry layoffs.
Japan’s animation and manga industry now faces a similar crossroads. As seen with companies like Capcom, Square Enix, Bandai Namco, and SEGA adopting trends from Western markets, promoting diverse representation, censorship, and shifting character designs.
Japan’s creative industries risk drifting from their traditional identity as they prioritize global ideologies and inclusivity for broader audience appeal and increased profits.
Western licensing distributors, particularly Crunchyroll, have capitalized on Japanese anime by distorting its original intent through questionable localized translations. These often feature unnecessary censorship, modern Western slang, and politically charged dialogue, reshaping the creative works for global streaming audiences.
Prominent platforms like Netflix, Hulu, and Disney+ now offer extensive anime libraries, with some going further to fund new adaptations or produce live-action remakes featuring politically motivated casting decisions, including race-swapping while downplaying sensual elements.
Modern day anime adaptations generally prioritize mass appeal over fidelity to the source material, diluting the artistic integrity of anime as a reflection of Japan’s culture and creative heritage.
The trend will strip anime of its distinctive identity, transforming it into a homogenized product molded to Western tastes rather than preserving its authentic Japanese essence.
We’ve witnessed numerous instances of Western audience influence on Japan’s anime and manga industry, including outraged “fans” of popular shounen series like Chainsaw Man issuing death threats to the creator over a chapter depicting the heterosexual male protagonist in a sexually satisfied scenario, shattering their unrealistic homoerotic shipping fantasies.
Meanwhile, fewer serialized “ecchi” franchises are being adapted, and when they are, they often undergo censorship to fit standards suitable for younger audiences and commercial viability. The notable absence of nudity outside designated hentai adaptations presents a concern of its own.
As previously discussed, Re:Zero‘s third season censored certain “loli” characters, with their petite designs being equated to depictions of actual children by western audiences, Japanese media is frequently judged through the lens of social themes and political correctness in foreign countries.
This often involves imposing external ideologies onto the medium, such as misinterpreting traditional Japanese character tropes like otokonokos, feminine boys, and crossdressing as representations of transgender identities.
These misinterpretations are often met with outrage and vitriol from mentally unstable trans individuals, who become infuriated upon realizing that their niche and relatively modern fetishistic identity are not being pandered to by Japanese mangakas.
Additionally, anime adaptations such as Goblin Slayer and Frieren face criticism from Western activists who perceive these fictional portrayals of monsters, depicted as mindless beings whole sole existence revolves around rape and murder within their respective fantasy worlds as offensive allegories for real-world ethnic groups, branding such depictions as forms of fascism.
Let’s not overlook how anime’s widespread popularity and cultural normalization in Western audiences have led to countless instances of artists being mocked, threatened, and ridiculed over accusations of “whitewashing.”
Bkub Okawa, the famed manga artist behind Pop Team Epic, became a target of such a crusade when he dared to depict a fictional squid girl from Nintendo’s Splatoon with a darker skin tone.
This led to backlash by Black “fans,” highlighting a troubling double standard. Racists who erase the race of prominent Japanese characters and impose their own identities onto them for the sake of representation, argue that it’s necessary for these characters to “be seen.”
Yet, the notion of “blackwashing” is dismissed, even though Whites and Asians are minority groups globally. When Black individuals push their racial identity onto foreign creations, it’s seen as progressive and needs protection.
This is the direct consequence of exporting otaku culture overseas. Anime has become overrun by entitled racists who seem to thrive on a culture of theft and victimization. They feel no hesitation in threatening violence against artists over perceived racial erasure, all because of fictional tans on fictional characters created by Japanese artists for Japanese audiences.
These are the same individuals who label others as “pedophiles” over loli characters, wrongly equating them to real living, breathing children.
They also tend to be the ones who only consume shounen adaptations, as everything else is deemed too “problematic” for their delicate sensibilities. The younger Western demographic, who view all media through an ethical microscope, rejects Japan’s traditional fanservice, claiming that depictions of characters with big busts are offensive and that things such as pan shots and revealing attires objectify women or worse, “sexualize minors.”
Entitled racists have no problem doxxing creators like Chibi Reviews, even going so far as to desecrate his deceased brother’s grave, all while playing the victim when a piece of artwork supposedly “erases” their representation.
To them, everything must revolve around THEIR identity, they’ll even go as far as to claim to have made anime popular in the West, despite primarily consuming “safe” adaptations like Jujutsu Kaisen, One Piece, Naruto, Dragon Ball, and Bleach.
These individuals can’t seem to relate to or identify with characters unless they see a reflection of themselves, they’ll ignore representation when it’s there and insist on culturally appropriating other characters for “representation” instead.
In their minds, anime “belongs” to them, granting them free rein to impose their racial identity onto characters without facing criticism.
But when the roles are reversed, when a tanned fictional character created by Japanese artists for Japanese audiences is depicted they treat it like a hate crime, incapable of understanding concepts like color and lighting without assuming malicious intent.
With North America and Asia contributing 72% of global revenue, industry insiders are under increasing pressure to make anime more palatable to these non-Japanese markets. This trend is exacerbated by Sony’s influence a company notorious for its scrutiny and censorship of Japanese games featuring heteronormative character designs and erotic-based fanservice elements.
Recently, Sony entered a “strategic partnership” with KADOKAWA, a dominant Japanese conglomerate that holds a monopoly on Japan’s literature and animation industries. The collaboration aims to outsource anime production to foreign studios and expand its global market reach, prioritizing profit over preserving anime’s cultural identity.
With Sony promoting “anime academies” and KADOKAWA embracing Western ESG ideology, alongside Western capital investments like Blackstone acquiring Japan’s largest e-manga platform, censorship and narrative shifts toward Western storytelling tropes seem inevitable.
Even though the Japanese have long provided “yuri” and “yaoi” content for those who enjoy it, the depiction of same-sex relationships between appealing fictional characters clashes with the core goals of DEI and ESG. These movements aim to dismantle beloved franchises and shove forced, unattractive inclusivity into your face that WILL diverge greatly from Japanese storytelling.
Similar to the impact of globalized ideology on video games, anime faces a cultural reckoning. Some Japanese developers have suffered financial setbacks due to soft censorship, such as removing gender-specific terms to satisfy Western sensibilities. Anime’s domestic market grew 10.6%, reaching ¥1.6243 trillion ($10.32 billion).
However, as Japan caters to foreign markets, cultural dilution becomes an inevitability.
Anime is gradually losing its distinct identity, shifting from a beloved art form to a globalized product molded by external pressures instead of staying true to its roots. “Problematic” elements, like ecchi, are being downplayed, nudity and nipples are disappearing from adaptations and the increasingly entitled Western audience, particularly younger viewers continues to mock other aspects of the medium they claim to enjoy, labeling them “offensive” or “illegal.”
According to Parrot Analytics, anime represented 6% of global streaming revenue in 2023, with North America alone contributing 41% of the global anime total from streaming. This growing reliance on international consumption underscores the influence of Western corporations and streaming platforms over anime content. Money talks, and as seen with the Sony-KADOKAWA partnership, there’s little we can do about it.
In 2023, Netflix dominated anime streaming revenue with $2.0739 billion, followed by Crunchyroll at $1.161 billion. Hulu secured third place at $903.03 million, with Amazon Prime Video trailing at $515.1 million. Other notable contributors included iQIYI ($217.7 million), bilibili ($153.9 million), Tencent Video ($137.3 million), Disney+ ($130.9 million), Max ($74.1 million), and MangoTV ($72.4 million).
Despite concerns over cultural dilution, millions continue funding platforms like Crunchyroll, which reshapes Japanese anime for Western audiences through localized adaptations. Netflix, leveraging its massive financial resources, also fuels this trend by funding its own anime adaptations while advancing a globalized agenda.
With streaming giants profiting immensely from pushing Japanese animation onto Western markets, they are increasingly licensing and producing even more content, creating a runaway industry shift that shows no signs of slowing down.
Asia led the market with $5.46 billion in sales, closely followed by North America at $4.97 billion. Together, these two regions accounted for 73% of worldwide anime merchandise sales.
Anime’s meteoric rise as a global medium has undoubtedly brought economic prosperity, and will continue to do that for many years to come but it comes at a cultural cost.
To protect its artistic integrity, Japan’s revered anime and manga industry would have to reject international demand and forgo billions in annual revenue, a fallacy that will fall on KADOKAWA’s deaf ears.
However, much like the gaming industry, anime may eventually reach a breaking point where the production of big-budget projects is no longer financially sustainable. When relentless pandering and ideological propaganda finally drag the industry down.
A collapse similar to a gaming industry crash may be looming within the next decade as the fleeting Western gold rush for Japanese animation reaches its peak and begins to decline.
This decline is likely fueled by the erosion of Japanese creative freedom, sacrificed to inject political agendas that cater to the sensitivities of foreign audiences. Adaptations featuring so-called “problematic” themes such as explicit nudity, sexual content, incestuous relationships, or sensual matters involving loli characters are on the path to extinction.
With the West now rivaling and poised to surpass Japan in annual anime revenue, social condemnation from Western audiences will drive censorship and regulatory changes, reshaping the medium to align with Western tastes and moral expectations.
What once stood as a bold reflection of Japan’s creative spirit risks becoming yet another mass-produced, culturally diluted commodity tailored for foreign markets that will surely meet a similar fate over the next decade. As studios chase profit abroad, the medium is losing its cultural authenticity, the very identity that made it a global phenomenon in the first place, entirely due to domestic greed and the pursuit of global profit.
(Thanks for bringing this to my attention, Kanchal.)
