Japan’s anime market has expanded to a record scale, driven by the growth of streaming services and soaring overseas demand.
This article explains how the market has evolved, examines challenges on the production side, highlights the strengths of Japanese studios, and explores the business opportunities for overseas companies.
We also discuss why collaboration with Japanese production studios is becoming a key factor in successful global content strategies.

In recent years, the presence of Japanese anime in the global market has grown stronger than ever.
The spread of streaming services has accelerated anime viewership worldwide, while character merchandise and licensing businesses have also expanded rapidly—pushing the overall market to grow at unprecedented speed.
At the same time, studios face serious issues such as overloaded schedules and rising production costs, revealing a complex structure where growth and strain are progressing in parallel.

Against this backdrop, orders and co-productions from overseas companies to Japanese studios continue to increase.
The quality of Japanese visual expression and direction know-how has effectively become an international standard, making Japanese studios highly sought-after partners in global content strategies.
This article organizes the latest trends and challenges in the Japanese anime market and explains, in concrete terms, the opportunities available to overseas companies that collaborate with Japanese studios.
For businesses aiming at global expansion, understanding Japan’s anime market can be a powerful strategic asset.

Market Size and Growth of Japanese Anime

Japan’s anime market has experienced rapid growth in recent years.
The expansion of streaming services and the strengthening of licensing businesses have further increased its influence both domestically and internationally.
Since the 2020s in particular, the digital shift in viewing habits has transformed anime from a TV-centric business into a large-scale global content industry centered on streaming.
Below are three major trends currently driving the anime market.

Strong Performance of Anime on Streaming Platforms

The spread of video-on-demand (VOD) platforms such as Netflix, Amazon Prime Video, and Disney+ has accelerated anime consumption worldwide.
Japanese anime, in particular, enjoys strong popularity in international markets and serves as a key “killer content” category for these platforms.

In 2023, the anime streaming market grew by more than 50% year-on-year, setting a new record.
Although the number of traditional TV anime titles is declining, there has been a rise in streaming-original series, short-form anime, and exclusive titles, with changing viewing patterns lifting the entire market.
We are now fully in an era where Japanese anime can be watched simultaneously worldwide, making the market increasingly attractive to overseas companies focused on global expansion.

Strong Character Merchandising and Licensing

Hit anime titles generate far more than just viewership.
The merchandising and licensing market—including character goods, toys, apparel, collaboration products, and events—remains a major revenue pillar of the anime industry.

In 2023, the character merchandising market reached approximately ¥700 billion, also hitting a record high.
Long-running series, theatrical releases, and rising character popularity on social media are directly driving this growth.
Overseas, anime characters are increasingly recognized as brand assets, and Japanese anime IPs generate sustainable business that transcends borders.

Growth in Overseas Deals and Regional Trends

As the anime market expands, transactions between overseas companies and Japanese studios have increased year by year.
By 2025, roughly 45% of Japanese anime studios were working directly with overseas partners, engaging in co-productions, subcontracting, and content licensing in various forms.

Regionally, the United States accounts for the largest share, centered on deals with major platforms like Netflix and Amazon.
For outsourced production phases, work is not only sent to China but increasingly to Korea, Taiwan, Vietnam, the Philippines, and across Asia more broadly.
These collaborations help Japanese studios diversify their production structures and tap new markets, while giving overseas companies access to high-quality content creation.

Supported by both domestic and international demand, Japan’s anime market is expected to maintain steady growth.
Within this context, the strategic value for overseas companies in partnering with Japanese studios continues to rise.

Current Realities and Challenges in Anime Production

Despite market growth, the production side of the industry faces serious problems.
Rising demand is met with talent shortages and increasing production costs, while revenue structures still depend heavily on whether a title becomes a hit.
For overseas companies, understanding this reality is a crucial prerequisite for successful collaboration with Japanese studios.

A Structural Problem: Roughly 70% of Titles Are Unprofitable

Even as the market grows, many studios struggle to earn sustainable profits.
One key reason is that lead production studios often shoulder most of the production costs while only handling the animation work itself, receiving little share of secondary or licensing revenues.

Rising unit costs and prolonged schedules further inflate per-title budgets, making it difficult to recoup investments.
As a result, it’s said that around 70% of anime productions fail to recover their production costs, raising concerns about the long-term sustainability of the industry.

Shifting Production to China, Korea, Taiwan, and Beyond

The trend of outsourcing parts of the production pipeline overseas has intensified.
Studios in China, Korea, and Taiwan offer strong technical capabilities and relatively favorable labor costs, making them common partners for Background Art (Art Board), In-between (Douga), and finishing work.

Partnerships are also expanding to studios in Vietnam, the Philippines, and other Southeast Asian countries, making anime production a de facto international division of labor.
However, rising overseas outsourcing rates and currency fluctuations (like a weak yen) are raising costs, prompting calls to rethink production structures.

Work Environment and Talent Development Challenges

Animators and Sakuga staff—the core of production—have long faced issues of long working hours and low pay.
High turnover among young creators makes it difficult to pass on skills to the next generation.

Overcrowded schedules often leave little time for proper training, causing talent development to lag behind demand.
As international exposure grows, improving work conditions is crucial not only for ethics but also for maintaining global trust and long-term sustainability.

Despite these challenges, collaboration with overseas partners—through funding and joint production frameworks—can help stabilize the production environment, creating better conditions to carry the appeal of Japanese anime into the next generation.

Core Strengths of Japanese Anime Studios

Japanese anime studios, which have produced countless hits and captivated audiences worldwide, possess distinctive strengths unmatched by studios elsewhere.
Their high standards in technical skill, expressive power, and production management—built up over decades—are key reasons overseas companies seek to collaborate with them.

High-Quality Sakuga and Visual Direction

Anime’s global popularity is largely driven by the quality of its Sakuga and direction—from subtle facial acting and movement, to detailed Background Art (Art Board), to dynamic camera work.

Powerful action scenes, nuanced emotional expression, and sophisticated handling of light and shadow reflect a deep detail-oriented production culture.
The commitment to crafting the best possible image in each cut is a defining trait of Japanese studios and a core competitive advantage.

Deep Understanding of Source Material and World-Building

Many anime projects adapt manga, light novels, or games.
Japanese studios excel at distilling the essence and message of the original work and transforming it into anime-specific expression.
Their careful approach to world interpretation and character psychology resonates with both existing fans and new audiences.

This ability to understand and reconstruct source material is a major strength not only for domestic adaptations, but also for original projects and anime based on overseas IPs—earning high regard in international co-productions.

Precision in Scheduling and Delivery

Japanese studios have highly refined production management capabilities for coordinating the many complex stages of anime:
Storyboard (E-conte), Sakuga, finishing, Background Art, Compositing (Satsuei), and editing.
They maintain strict overall schedules while managing fine-grained division of labor.

Because schedule delays in international co-productions can jeopardize entire projects, Japan’s culture of on-time delivery is especially valued.
For overseas companies, partnering with Japanese studios offers confidence in producing high-quality work on a reliable timeline.

Opportunities for Overseas Companies in the Japanese Anime Market

Japan’s anime market has become a massive industry with growth on both domestic and international fronts.
For overseas companies, the benefits go far beyond simply “having high-quality anime produced.”
Anime can drive IP expansion, brand elevation, and broader business growth.
Below are concrete opportunities the Japanese anime market offers to international partners.

Advantages of Co-Producing with Japanese Studios

Collaboration with Japanese studios is not simple outsourcing; it is co-creation on the creative level.
From the planning stage, studios engage deeply in world-building and Character Design (Chara Design), actively proposing ideas to maximize the quality and impact of the work.

Careful direction that brings out the best in the source material, and storytelling that resonates emotionally with viewers, give Japanese productions a distinct competitive edge in global markets.
Co-production not only yields high-quality content—it also allows overseas companies to learn from Japan’s production culture and techniques and integrate them into their own content strategies.

Potential for Streaming and IP Licensing Expansion

The commercial success of Japanese anime is underpinned by IP-driven business, not just viewership.
Character goods, toys, apparel, games, events, and collaborations provide multiple revenue streams, allowing hit titles to evolve into long-term businesses.

By co-producing anime with Japanese studios, overseas companies can gain:
• Global brand recognition via simultaneous worldwide streaming
• Character-IP-driven merchandising and media mix expansion
• Revenue maximization when integrated with platform strategies

With streaming markets growing, anime IP originating in Japan holds vast potential across regions, increasing its investment value for international partners.

Enhancing Brand Value via the Japanese Market

Japanese anime fans are highly engaged, and hit titles can grow into social phenomena.
For overseas companies, collaborating with Japanese studios can powerfully associate their brand with Japanese culture, which is a major strategic advantage.

Creating content that earns trust in Japan directly boosts brand value across Asia and beyond, offering strong leverage for global expansion.
By tapping into Japan’s fan communities and event culture, companies can sustain long-term popularity for their titles and build successful market-entry models.

In short, Japan’s anime market is an extremely attractive field that offers overseas companies growth opportunities not only in content production, but also in IP strategy and brand value maximization.

Conclusion

Japan’s anime market has achieved unprecedented growth through the spread of streaming platforms and the expansion of IP-based business.
At the same time, production sites still face talent shortages, rising costs, and fragile revenue structures—creating a complex situation where market expansion and operational strain progress simultaneously.

Despite these challenges, Japanese studios continue to uphold their unique strengths—high-level Sakuga and direction, deep understanding of source material, and precise production management—earning strong trust from entertainment companies worldwide.
By partnering with Japanese studios, overseas companies can create globally competitive anime, then extend that success through merchandising and licensing into long-term businesses.

As global content strategies become ever more important, understanding Japan’s anime market and choosing the right partners is a clear path to success for overseas companies.
Co-producing with Japanese studios offers not only high-quality animation, but also powerful opportunities to maximize IP value, enhance brand strength, and reinforce presence in international markets.