Japan's Animation Industry Takes Big Hit From Pandemic, Sales Drop For First Time In A Decade

Japan's animation production industry has become the latest target hit by the pandemic as sales fell 1.8 percent on year in 2020, the first drop in a decade, Kyodo News reported.

Photo Insert: A poster of the animated movie based on the popular manga, "Demon Slayer." (Kimetsu no Yaiba)

According to a credit research firm, even the roaring success of the blockbuster film "Demon Slayer" manga was not enough to offset the effect of coronavirus restrictions.

The industry's sales totaled 251.1 billion yen ($2.3 billion) last year, down from a record 255.7 billion yen in 2019, Teikoku Databank said in a recent survey report.

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 yen in revenue.

Among other hit movies were "Violet Evergarden: the Movie," a Kyoto Animation Co. film which some of the victims of the deadly arson attack at a studio of the company two years ago had been working on.

Still, the COVID-19 pandemic had delayed production processes at many studios, leading 48.6 percent of 300 animation production companies surveyed to report a sales fall in 2020.

While average annual sales per company fell for the first time in four years in 2020 with 831 million yen, some 31.6 percent said their sales rose last year. Profit-wise, 37.7 percent incurred losses and 29.5 percent said their profits dropped, as 31.1% reported profit growth, according to the survey.

The outlook for the Japanese animation industry appears difficult, with competition likely to intensify from Chinese animation firms, the research firm said.

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 said.

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