KADOKAWA Wants More Anime Seasons, Fully-Owned Studios, AI Implementation

KADOKAWA recently published its earnings results report for the second quarter (September 30 being the cut-off date) of the fiscal year ending March 31, 2024. In it, the company expressed its desire for increased animation production and made multiple mentions of AI.

Back in 2021, KADOKAWA notably stated its intention to produce 40 anime a year until 2023 (a goal which has been achieved, says the new report). Now, the apparent keyword in regards to its anime production plans is “stories,” which KADOKAWA uses to describe seasons and episodes. While KADOKAWA’s mid-term management plan for the 2023 to 2027 financial years does mention that it will “continue to acquire popular IPs from other companies” in addition to its “diverse range of in-house original IPs,” it seems that the priority is to “increase the number of seasons and episodes per title.”

That decision may explain why a new anime project was recently announced for I Got a Cheat Skill in Another World and Became Unrivaled in The Real World, Too, which happens to be one of KADOKAWA’s top 10 “Best-selling Titles” in the video segment (this takes into account the sales from rights licensing) for the 2023 financial year YTD. The anime on the very top of that list are OSHI NO KO and My Happy Marriage, which aired this year and have had second seasons announced. Most of the other anime series (the Gamera franchise is the only outlier, although it did receive an anime this year) in the top 10 already have multiple seasons but are unlikely to end any time soon (like Bungo Stray Dogs, which is getting some form of continuation to its recent fifth season), or have recently reached two-season status (Spy Classroom and The Eminence in Shadow). 

KADOKAWA isn’t just interested in outputting “stories,” of course. It also wants more fully-owned studios, M&A (mergers and acquisitions) “activities and alliances,” and an increase in the number of in-house titles from five to 20 annually. (The current anime studios under the KADOKAWA Group include ENGI, Kinema Citrus, Studio KADAN, and Raging Bull. The latter, which is “centered by” Eureka Seven director Tomoki Kyoda, joined the family in September of this year.) The company has an eye on AI too — while it brings up the “training and development of human resources” and production of “creative human resources,” there’s also mention of “AI-based production support,” “AI systems for editing and animation production,” an “AI-based translation system,” and the production of “human resources proficient in AI utilization.” 

Some other information from the earnings report that caught our eye:

• KADOKAWA’s animation business had a growth of 18%, which it says is “primarily” due to streaming (both domestic and international) and rights-licensing. The 1st Half YoY Analysis section expands on this a bit, saying that sales increased by approximately 18% “both in 2Q and on a YTD basis.”

OSHI NO KO is highlighted as a sales contributor for the first quarter (streaming sales) and second quarter (rights licensing sales for games/merchandise).

• The analysis adds that steady sales growth allowed KADOKAWA’s operation profit on the animation side to grow in spite of additional expenses incurred by “strengthened international sales promotions.”

The Eminence in Shadow 2nd Season and the upcoming Delicious in Dungeon (which premieres next January and will run for two cours) are expected to “contribute to sales and profit” in the second half of the financial year.

• The report notes that “IP is being hoarded by platformers” as streaming competition intensifies.

• KADOKAWA wants to “Promote a new license strategy” for its animation business and have it collaborate with the game business side.

Mushoku Tensei: Jobless Reincarnation was the top-earner from the publication side for the 2023 financial year YTD, but the OSHI NO KO anime holds first place overall when combining the publication, video, and gaming segments, with over 2,000 million yen (~US$13,37 million) in net sales. 

• “Aggressive spending on advertising and promotion” for the KADOKAWA SCHOOL OF ANIME and KADOKAWA SCHOOL OF MANGA continued to be carried out in Q2, resulting in a -11.4% operating profit loss. KADOKAWA says that the application count for the schools “has significantly surpassed initial expectations and is increasing.”

• KADOKAWA is looking to increase its global presence with stronger advertising and by hosting event exhibitions and “other activities.”

Source: KADOKAWA Earning Results for the 2nd Quarter Ended September 30, 2023

Anime Trending News Writer who writes about all sorts of things, including upcoming anime series and movies, anime-related video games, animated music videos, manga and light novels, VTubers, and anime collaborations. Once in a while, he'll put out a review too. Every anime season, Melvyn looks forward to discovering new standout episodes and OP/ED animation sequences. Some of his free time is spent self-learning Japanese.
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