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Geographical dynamics of the Japanese animation industry

L’industrie japonaise de l'animation. Evolution géographique
Seiji Hanzawa


Alors que la recherche géographique sur l'industrie de l'animation a mis en évidence le rôle des districts industriels et de la mondialisation, au Japon, elle n'a fourni qu'une perspective limitée sur les dynamiques territoriales notamment à l’œuvre en dehors de la région de Tokyo. Cet article explore les impacts territoriaux de cette industrie suite aux changements technologiques et aux nouveaux processus de production en prenant appui sur l’étude des sociétés d'animation japonaises depuis 2000. Les résultats suggèrent que, si un pan du développement de cette économie en dehors de Tokyo a été facilité par les nouvelles possibilités de production induites par le numérique, cette décentralisation tous azimuts s’explique aussi par la détérioration d'environnement de production fondée sur l’agglomération spatiale des industries créatives.

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This study was supported by the Japan Society for the Promotion of Science (JSPS) KAKENHI Grant-in-Aid for Scientific Research for Young Scientists (B) (grant numbers JP24720381 and JP17K13583). The author would like to thank the anonymous referees for excellent helpful comments and suggestions.


1Research into the geography of the animation industry has highlighted the industrial agglomeration and/or the globalization (e.g., Scott, 1984; Hanzawa, 2001,2004; Yoon and Malecki, 2009; Yamamoto, 2014). However, although agglomeration and globalization are common in Japan, there have been a change in the location patterns, with Japanese animation production companies’ establishing their head and/or branch offices in domestic regions outside Tokyo (locational decentralization) since the 2000s and particularly the 2010s (see section 2). In other words, knowledge on the dynamics of the geography of the animation industry remains limited. The aim of this paper is hence to address the recent location patterns of the Japan’s animation industry from a division of labor perspective during the technological transition period. In short, the research question is “why the locational decentralization phenomenon has emerged since the 2000s?”.

  • 1 For example, Japanese top 3 animation studios based on sales — Toei Animation, Sunrise, and TMS Ent (...)

2That limitation stems from the lack of attention to the global variance in the “distribution and production sectors”(Hirsch, 1978); that is, although the characteristics of the division of labor in creative industries depend heavily on national/local policy (e.g. antitrust, protection for subcontractors, telecommunication regulations, and subsidy system) and are closely related with locations of the establishments (Hanzawa, 2016), few studies have explored the relationships both between each of the sectors and within production sector in terms of cultural/social variances between Hollywood system and the systems in other countries. In the animation industry, for instance, Yoon and Malecki (2009) argued that the emergence of 3D animated films reinforced the agglomeration in both the USA and Japan and the majors—large multinational conglomerates—involved in the financing, distribution, and production of animated films operated as global animation production network hubs. In Japan, however, one of top two 3D animation companies, Sanzigen, which was established in 2006, has located their new offices outside the Tokyo area since 2012 in Kyoto, Fukuoka, and Nagoya; moreover, the majors have a relatively weak presence as only the Sony group continuously produces animation for the domestic market through its animation related companies such as Aniplex, which was established in 1995 and A-1 Pictures, which was established in 2005; with the other powerful Japanese animation companies not being part of the multinational majors1. Mihara (2018) delineated the socioeconomic dynamics of the domestic business practices within the Japanese animation industry and claimed that it was in danger of little more than subcontractor to Euro-American and Asian majors. Consequently, Mihara considered the Japanese animation production companies and distribution companies as a collective unit and did not distinguish the domestic distribution sector, which involved relatively large-sized contractors responsible for raising funds and for sales, from the domestic production sector, which involved relatively small-sized subcontractors responsible for the actual production (i.e., manufacturing, painting, and editing), even though there had been many reported conflicts of interest between the sectors regardless of whether the predominant creative industry distributors were multinational conglomerates or not (Hirsch, 1972,1978,2000; Caves,2000:37-72; Hesmondhalgh,2013:32-33). This typical dichotomy within the context of geography (e.g., Scott, 2000; Coe and Johns, 2004; Cohendet et al. 2018) in which the globalized conglomerates are distributors and/or production network hubs and the localized much smaller subcontractors are the actual producers provides only a limited perspective on the geographical dynamics of the Japanese animation industry.

3To avoid these types of misconceptions, this article examines how the Japanese animation company domestic location patterns; that is, the agglomeration and the locational decentralization; have been historically influenced by changes in the production technologies and processes. In other words, this paper focuses on the production sector and its endogenous location factors to reveal the relationships with the exogenous location factors related to the external distribution sector.

4There are two reasons why such viewpoint is pertinent to understanding the industry’s location patterns. First, the term of “the animation industry” used by workers in this industry of Japan generally only refers to production sector. Accordingly, “the animation industry” and “animation companies” in this paper refer only to “the animation production industry” and “animation studios or production companies”. As a matter of fact, the “Anime Industry Report”, which is published annually by the AJA (The Association of Japanese Animation), divides the Japanese animation market into two types: “in a broad sense” and “in a limited sense” (AJA, 2018). In this case, the former’s market size is based on estimated animation and animation related revenues and the latter’s market size is based on the estimated total revenues of all domestic commercial animation studios. Therefore, based on these common divisions within the Japanese animation industry, much of the distribution sector (i.e. the companies focused on planning, investing, distributing, and promotion processes in the animation production such as toy enterprises, TV stations, film distributors, book publishers, and audio-visual media companies etc.) is external to the industry; thus to explain the accurate background to the geographical patterns of the Japanese animation industry, this paper focuses on the production sector, in which the companies decide their corporate strategies and locations on the basis of such notion, aside from right or wrong. Second, the characteristics of the division of labor between each sector and within the production sector differ widely as the animation companies are significantly affected by the distribution sector, in which companies are large-sized and influential over the whole industry compared to the ones of production sector, acts as gatekeeper as whether the products, created by another sector, reach the market (Hirsch, 1978), all of which means that division of labor between the sectors involves strained relationships and regular confliction . Within the production sector, however, division of labor is rather determined by the production technology and the physical nature of intermediate goods and final products: size, weight, dividable or not, tangible or intangible, and so on (Hanzawa, 2016). It is necessary, therefore, to analyze the geography from the viewpoint of distinguishing the dissimilar location factors affected by these two types of division of labor.

5To be noted, the industry, since the latter half of the 1990s, has undergone digital innovations in production technology antecedent to computer graphics imagery (CGI) or 3D animation techniques. Those are, as detailed in section 3, computer-based postproduction processes and following digital drawing processes in traditional 2D animation (henceforth referred to as “digitalization”). Consequently, it was, also detailed explanation to be given in section3, this technological transition that was trigger for having deteriorated production environments, since the 2000s, such as poor labor conditions, which in turn have resulted in gradual locational decentralization.

6The study was based on secondary data research, corporate questionnaire surveys, and semi-structured interviews with Japanese animation companies (Hanzawa 2001, 2004, 2013, 2017). The surveys were conducted in three different time periods: in 2000, a mail survey was conducted involving 71 respondents from 287 firms and interviews with 33 firms to investigate the agglomeration; in 2009, a follow up was conducted involving interviews with 20 of the previously interviewed 33 firms in order to understand impacts of the digitalization and fluctuation of the animation market environment over the 2000s: and during 2013 and 2016, interviews were held with 32 organizations focused on the locational decentralization. The organizations involved in the third survey included three previously interviewed production companies (one of which had located its head office outside Tokyo), one non-Tokyo local government department, 22 production companies that had located their head and/or branch offices outside Tokyo, one production company in Tokyo, two animation-related rights management companies in Tokyo, two closed production companies in Tokyo, and one laboratory at a non-Tokyo university. These surveys commonly focused on revealing the following categorized information: criteria and assessment for locational environments; the ways of operating each company’s own business and production activities; nature of inter-firm transactions relationships (e.g. types of outsourced and received processes and/or intermediate products, their counterparties locations, and the ways of executing such operations); employment and labor market conditions (e.g. required skills, proportions of respective specialized occupations, ways of nurturing employees, and wage systems); and prospects of the individual company itself and the whole industry. The interview length ranged from approximately 6 hours to 1 hour.

7The remainder of this paper is organized as follows. First, an overview of animation company location patterns and the historical background to the industrial agglomeration are given. With a focus on how traditional 2D animation was digitalized, section 3 outlines digital innovations in production technology and their impact on the industrial structure transformation which led to the deterioration of the production environment. The discussion section examines the relationships between locational decentralization and production environment deterioration arising fundamentally from the characteristics of the agglomeration. The final section summarizes the discussion and describes the possible future for the Japanese animation industry.

Vertical disintegration and industrial agglomeration

Agglomeration factors and advantages

8While the emergence of the Japanese animation can be traced back to 1917, it was not industrialized until 1956 when Toei Animation (then Toei Doga) was established. Toei Animation, which has continued to be the country's largest company, was initially focused on feature length animated film at first. The basic industry infrastructure such as classification of the production processes, work flows, and occupational categories were therefore determined and developed by the company. Mushi Production, which was founded in 1962 by legendary manga artist TEZUKA Osamu and declared bankrupt in 1973, was a beneficiary of these early developments as it was able to hire the trained animators from Toei Animation and produced Japan's first 30 minute animated television series, Tetsuwan Atomu (known as Astro boy in English). Although these two companies originally employed almost all workers as permanent staff and produced the animations generally in-house, the beginning of the animated television series era has changed the situation drastically and became a defining event in the Japanese animation industry, which led to, as anticipated by flexible specialization theory (Piore and Sabel,1984),the development of vertical disintegration resulting in the rise of small and medium-sized enterprises(SMES)specialized in particular production processes, and the formation of the industrial agglomeration.

9Compared to the feature film market, the television market was uncertain for the animation companies because of its unpredictability in terms of both quantity and quality of productions and labor force required. In the 1960s, the Japanese motion picture industry was dominated by domestic major motion picture enterprises, such as Toei, which was the parent company of Toei Animation, and block-booking was common custom. Consequently, Toei Animation was able to produce its animated films periodically and obtain relatively stable proceeds thanks to its parent company. However, as the television market was more competitive because it was based on audience ratings, the realization and termination of animation programs depended on the intentions of the major domestic commercial television stations, which were oligopolistic distributors until the latter half of the 1990s, and on the program sponsors, which were typically, foods enterprises and toy companies. Therefore, as the broadcast periods were uncertain, animation companies faced destabilization of their revenues and fluctuations in required labor force in terms of both quantity and quality. Due to the conspicuous success of Tetsuwan Atomu leading to many new industry entrants attendant on a rise in demand (Yamaguchi, 2004: 82), animated television series market expanded to include animated series on a wide range of genres such as science fiction, animals, and school life. This widening of the market meant that if a company hired permanent workers to produce animations in-house, there could be unnecessary fixed costs depending on genres because many industry professionals (i.e., directors, scriptwriters, and animators among others) have their own favorite (or unfavorite) and/or skilled (or unskilled) fields of animation. It, therefore, became more rational for studios to hire freelancers and subcontractors according to occasional necessity concerning quantity and quality.

10In addition to the main factors encouraging the studios to develop vertical disintegration, there were other two complementary factors. First, as the required television animation quality was normally inferior to that required for animated movies, the obstacles to outsourcing lessened, since in-house production was, generally speaking, considered to be ideal to produce high quality animation due to easiness of dense communication between workers. Second, freelance wage levels were relatively high in the early days of the television animation, but fixed salary system was more common for permanent animation workers in animation companies, and especially in the Toei Animation and Mushi Production companies. Therefore, highly skilled workers could earn higher wages as freelancers.

11The reason why this vertical disintegration could realize was that each production process, in terms of production technology and facilities, was clearly distinguished from the other processes, particularly for traditional or analogue production, despite some integrated processes under the circumstance of development of digitalization since around 2000 explained in detail in section 3 (Figure 1), because each process was highly specialized in charge of various occupations (Table 1) and manufactured dissimilar intermediate goods; thus, as long as there were various subcontractors, it was only limited processes and quantity of work that the major studios needed to maintain in-house in order to fluently manage the projects.

Figure 1. Animation production flowchart

Figure 1. Animation production flowchart

Processes colored in gray were digitalized in the 2000s.

Source: Dejitaru Kontentsu Gyou Koyou Koudoka Kondankai (2007), Anime Jinzai Ikusei Kyōiku Puroguramu Seisaku Iinkai (2008a, b), Kamimura (2009).

12This vertical integration resulted in an industrial agglomeration in Tokyo. As of 2016, there were 642 animation establishments in Japan, 542 of which (87.1% of the total number in Japan) are in the Tokyo prefecture and only 12 establishments (1.9%) are in Osaka, which is the second largest prefecture except for Kanagawa adjacent to Tokyo although, compared to 2011, the industry had already experienced locational decentralization (Table 2). Unfortunately, there is no reliable age data on the locations, but most of the representative examples in non-Tokyo locations referred to in AJA (2018) were established after 2010 except for Kyoto animation, which was established in 1981 and P.A. Works, which was established in 2000. These two exceptions, which locate their head offices outside Tokyo, are known to produce high quality animations; however, it was not until after the first half of the 2000s for Kyoto animation and the latter half of the 2000s for P.A. Works that they were able to produce their own animation products as prime contractors. In other words, it was only possible for them to constantly produce animation products after the digitalization diffusion in the 2000s.

Table 2. Location of the animation establishments in Japan

Table 2. Location of the animation establishments in Japan

Source: AJA (2014, 2018).

13Before that time, animation companies and freelancers had to be located near to each other to maximize the benefits of inter-corporate goods circulation and information exchange as television animation series had very short production periods to meet the weekly deadlines. Further, as the industry was made up of small-medium-sized companies and the freelancers, many of which were replaced for new animation products depending on the need, business relationships tended to be fluid and unfixed. It was, therefore, indispensable for animation companies and freelancers to develop client and business networks through unofficial parties and meetings. Since these networks were fostered based on personal rather than corporate relationships, this allowed for animation companies and freelancers to fluidly conduct new transactions, which also meant that it was difficult for the companies be located outside Tokyo.

  • 2 Other influential animation companies, Tatsunoko Production and Tokyo Movie—successor at present is (...)

14The animation companies were mainly located in Tokyo’s western suburban areas (Figure 2). Most animation companies were established by independents from existing ones, their roots could be traced back to pioneering firms such as Toei Animation and Mushi Production. Therefore, as these two companies had been established in the western suburbs of Tokyo2, the independent offshoot companies were in the same area.

Figure 2. Locations of animation industry establishments (2009) in the Tokyo region

Figure 2. Locations of animation industry establishments (2009) in the Tokyo region

Source: 2009 Economic Census of unpublicized individual data.

15Another exogenous location factor was that the animation companies needed to be close to the processing laboratories and the major commercial television stations that were providing the funds and distributing animation products; therefore, as they were all located in Tokyo, this gave rise to the concentration of animation companies in the same area.

Agglomeration disadvantages

16The dense human and business networks not only underpinned the industrial agglomeration but sometimes made it difficult for the actors within the agglomeration to deal with new challenges or flexibly respond to drastic business environmental changes.

17From the animation companies’ view, if the workers they had trained in-house moved to another company or became independent, it was very likely that as a member of another company or as a freelancer they would cooperate with their old companies someday. Therefore, there were significant interdependencies between the companies in the Japanese animation industrial agglomeration, which became known as “Anime-mura (Anime village)” (some interviewees; Mihara, 2018: 7).

18This expression, however, had both positive and negative meanings in the community. On the positive side, it was the basis for the agglomeration advantages described above, but on the negative side, it created a “lock-in (Grabher, 1993)” situation: that is, the dense social ties within the pseudo-organization like village caused difficulties for the animation company when developing new ideas because of the restrictions in the relationships. In other words, animation companies tended to determine the business affairs on the basis of not rationality but excessive consideration for various relational backgrounds such as long-term personal association and longtime past lending and borrowing. Because of the smallness and openness of this community, these social ties also circulate significant information about the companies’ thoughts and operations (both positively and negatively) within the agglomeration. First, the flexible networks according to each animation product quality were consistently important; however, some interviewees pointed out that the distributors’ criteria for suitable project members were often dependent on past human relationships rather than capabilities. Second, the deep interdependency between the animation companies' production capacities hampered their independent business trials because approval was needed from the others; for example, if an animation company wished to change any of the standardized business practices such as the ratio of production funds distributed to each production process, it was nearly impossible to enact unless almost all other companies had the same intentions. Third, even if a certain animation company disliked common industry practices such as the high dependence on subcontractors and the high industry turnover rate and wanted to train animators in-house and employ them as permanent workers, the animators themselves, who were often attracted by their favorite animation product and superficial good wage and/or positions, were more likely to move from company to company and/or become freelancers because animation workers, especially animators, know well the others’ labor conditions, company reputations , and prevailing ways of operation in production processes.

19These lock-ins would not have been a serious problem if the animation market had continued to have stable growth and there had not been many industrial structural changes. However, the diffusion of digital technology since around 2000 resulted in significant upheavals to the Japanese animation industry market environment and production technologies, which in turn changed the division of labor characteristics, as discussed in the following section; in consequence, lock-ins pertain to this village-like characteristics had become urgent issues for the Japanese animation industry to be dealt with since the 2000s.

The consequences of the digitalization since around 2000

Digitalization in the Japanese animation industry

20As mentioned in section 1, the digital innovations in production technology in terms of use of computers had been used in 2D animation after the latter half of 1990s and before the prevalence of computer graphics imagery (CGI) or 3D animation techniques. Digitalization has been being gradually introduced to each process as shown in Figure 1, with the first wave being applied to postproduction processes and some production processes such as “ink and paint” to daub inbetweens; thus, core animation processes such as “layout”, “inbetween”, and “original picture” in charge of animators were hardly digitalized in the 2000s, and this type of animation can be said as “half-digitalized 2D animation”. Full digitalization was not completed in those processes within almost all companies and freelancers until the latter half of the 2010s. Even today, despite the prevalence of 3D animation technology within the Japanese animation industry, utilization of the various production technologies is still common so that half-digitalized 2D, full-digitalized 2D, 3D, and 2D/3D hybrid animations coexist within the Japanese animation industry. Therefore, the fundamental changes brought by digitalization in the 2000s are still being felt today.

21First, the coexistence of non-digital and digital processes led to a widening productivity gap for these respective processes. On the one hand, since around 2000, in-house production became more possible because computers allowed for some processes to be integrated, and digitalized “ink and paint” and post production processes became more profitable due to increased productivity. On the other hand, however, as it became harder for the non-digitalized processes, still done by hand, to keep up with the rising level of representation enabled by digitalization, these processes have suffered from decreasing productivity.

22Second, outsourcing to animation companies abroad became easier. Although outsourcing to foreign companies had already started in 1973 (Yamaguchi, 2004; 133)and had contributed to the formation of industrial agglomerations in Korea and China (Yamamoto, 2014), the remarkable expansion of outsourcing abroad in the 2000s was a result of severe shortages in Japan’s domestic animation industry production capacity and of facilitation by the concurrent digitalization. Interestingly, most interviewees commented that the principal reason for outsourcing abroad had been the lack of quantitative domestic production capacity rather than cheap labor, which had arisen because of the rapid increase in the packaged video media market (i.e., DVDs amongst others) in the 2000s (Figure 3), which is discussed in more detail account in the subsequent subsection.

Figure 3. Number of animation titles for packaged video media released in Japan

Figure 3. Number of animation titles for packaged video media released in Japan

Source: Annual Editions of A research for Information and Media Society.

23Consequently, all these changes resulted in a deterioration in the Japanese animation production environment, which led to the subsequent locational decentralization.

Deterioration of the production environment caused by both digitalization and the concurrent distribution side changes

  • 3 Such situation has become widely known due to the recent reports by the press too (e.g., Margolis ( (...)

24As reported by Okeda and Koike (2010) and Morisawa (2015), poor labor conditions such as long working hours and low wages of animation workers, especially animators, had prevailed in the Japanese animation industry since the 1960s, but became worse from the 2000s due to the digitalization and distribution changes3. These were three main fundamental distribution changes.

25First, although the traditional animation market in the 1960s was heavily dependent on the television market, this shifted to an amalgam of television and packaged video media market in the 2000s. For the animation companies, the emergence of the packaged video media market meant a lowering of their dependence on the television stations but increased the need for higher quality, primarily because the target viewing audience also shifted to adults, who cared more about quality than children.

26Second, the main animation project development mode shifted from traditional sponsor model to “the production committee (Seisaku Iinkai in Japanese)” model in the latter half of the 1990s (Hanzawa,2016:101-104; Mihara, 2018:6-7). In this model, multiple companies almost all of which were related to the animation business and had overlaps with the distribution sector (i.e., TV stations, book publishers, advertisement agencies, and audio-visual media companies amongst others) organize a voluntary association, called production committee, under a partnership agreement on respective animation projects in order to diversify the investment risk. The diffusion of the model allowed for an increase in the variety of animation products and the number of those released.

27Third, the rapid growth in the packaged video media market (known as the “Anime Bubble (economy)”) from around the first half of the 2000s came to an abrupt end in 2007, which resulted in a shortage in Japanese animation industry domestic production capacity and consequent disorder in the production schedules of various projects in the animation industry. The following end to the growth and continual decreasing in the packaged media market led to the domestic distribution sector companies gradually losing funding and their risk taking capabilities.

28Because there was a need for higher production capacity in terms of both quantity and quality in the packaged media market, this led to a shortage in the domestic production capacity, for non-digitalized processes, especially in charge of animators, faced the difficulty in raising their productivity. The demand for high quality but the persistence of low productivity made most animation production schedules in general fall into disarray. Consequently, to compensate for these shortages, as a stopgap solution, outsourcing abroad and domestic lower-skilled workers trained in shorter period have prevailed since the 2000s.

29However, these methods for dealing with the expanded industry demands resulted in an erosion of the social basement of human resource developments within the Japanese animation industrial agglomeration. Because of the high interdependency between Japanese animation companies and freelancers, the increase in the number of lower-skilled workers inevitably made the production schedules tighter, which was exacerbated by the emergence of the production committee model. Even after the end of the “Anime Bubble”, companies joining these committees, under the premise that “many tries would lead to success in the end”, have been likely to invest relatively smaller sums into the many animation projects; consequently, the excessive number of animation titles have been being released despite the decline of those in short period just after the market disruption. In addition, because of the decline in profitable titles, those companies with limited knowledge about the reality of the production activities, began to further micromanage production work such as a superficial beauty of the picture and a choice of famous but busy staff, which often hindered effective project management.

30These deteriorating production environment led to a further deterioration in labor conditions, with even longer working hours and lower wages being offered to animators; for example, low-skilled animators were earning no less than approximately 1.1million yen annually (JAniCA, 2015: 103). Therefore, the labor conditions were worse than in the non-digitalized period as the animators were required to draw higher quality pictures with lower productivity under a commission system based on the number of completed pictures. This deterioration in conditions led to higher turnover rates and lower morale of the animators; moreover, the situation caused the difficulties in their skill formation, which inevitably led to a further deterioration in the production environment. In other words, the Japanese animation industry fell into a vicious circle.

31In short, since the agglomeration disadvantage as lock-ins, which was connected with the Japanese animation industry’s characteristics formed historically, had prevented animation companies from changing their established practices, the problem which the Japanese animation industry had faced was the difficulties in reconfiguring its traditional division of labor system in order to deal with the significant changes in the 2000s. On the one hand, as the animation companies were essentially receiving orders from the distribution sector, they tended to take one new project after another due to the deficiency of operating fund arisen from the lack of stable assets such as valuable property rights. On the other side, distribution companies were likely to focus on their business to release as many titles as possible and pay little attention to the conditions in animation companies. These tendencies were to be facilitated by the fact that most animation companies have concentrated only on actual animation production work and been indifferent to the distribution side of the business.

32While some animation companies which disliked such traditional behavior without strategic management vision attempted to develop their own strategies and distance themselves from these animation industry’s characteristics: however, they found it difficult to realize those strategies because of the high interdependency of the actors in the animation industry and the pervasive influence of other companies. Therefore, the negative pseudo-organizational rigidity of the industrial agglomeration in Tokyo, which had been restricting respective animation companies’ independent business strategies, became apparent in the 2000s when the significant industry changes occurred.

Locational decentralization: a counter strategy against the deterioration of the production environment

33To remove themselves from the situation and be free to execute their own business strategies, several animation companies established their offices outside the Tokyo region, which served to limit the influence of other animation companies by means of keeping distance from the circulation of information and human resources within the agglomeration. In this section, two companies’ cases (X and Y) are given to exemplify the growth of the animation industry outside the Tokyo agglomeration. Both of them locate their headquarters and core production offices outside Tokyo.

34X is a semi-leading rising company well known for its animation quality. With regard to the advantage of not being in Tokyo, X said that it avoided the involvement in the scramble competition for talented persons, which was inevitable in Tokyo; furthermore, it could enable X to train employees under a salary system from long-term perspective. Based on the extremely high ratio of in-house production, around 90 percent, X restricted the influence from the other animation companies to minimum level and pursued its own ideal management and production styles. X considered that the ideal style was to sell its own animation products for itself because the typical characteristics of the Japanese animation industry (i.e., an aggregate of receiving companies from distribution sector) were wrong. X, therefore, regarded Disney as ideal model for both internalized distribution and production despite the admission of impossibility to become the same level; hence, over time, X had been experienced in the distribution business: to sell their own animation related products and to hold animation events by utilizing their animations. Interestingly, X admitted that the digitalization had enabled the non-Tokyo animation companies to become prime contractors, which was premise to be realize its ideal, in production networks.

35Y is a mid-sized company and also well-known for its animation quality. Similar to X, Y saw the advantage in being located outside Tokyo as they were able to properly train their employees without having to worry about employee poaching or high staff mobility with low working morale. Y claimed that the almost full in-house production like firm X would not be possible unless the studio was located in a non-central region. When Y was initially established, the president believed that what Y would have accumulated in the non-central region could not been easily eroded because of low employee mobility. Y also said that as the animation industry could not yet find the way to convert what they wanted to create to something of commercial value, animation productions had no choice but to become independent so as to survive. However, the president of Y showed the recognition that he was not yet so strong that he wanted to maintain his good relationships with the major (media) companies although animation companies, like X, might need to become stronger. According to his understanding, the reason why only firm X showed a strong attitude towards the media companies was that X had obtained a “soil” (or breeding ground), which had enabled X to create their own animation works continually in isolation (from TV stations and advertisement agencies, etc.); hence, Y needed to maintain these relationships while at the same time gradually developing its independence with aiming at X style.

36Therefore, if animation companies, in order to continue to produce animation sustainably, intend to be independent with strong will and maintain distance from the existing Japanese animation system, they will have a strategy to train talented employees in-house to build the background to enable them to produce high quality animation works, which would give them strong bargaining power over the distribution sector; on the basis of this recognition, non-Tokyo locating is utilized by several animation companies.


37This paper focused on the Japanese animation industry’s domestic development and location patterns in association with the changes in production technologies and distribution processes. Historically, the beginning of the animated television series, which had short production/on-air periods leading to the difficult in predicting future market trends, increased the uncertainty of the animation market. Consequently, the vertical disintegration between animation firms, which was caused by their reluctance to the rigidity of hiring permanent workers in-house, led to the establishments of small and medium sized specialized animation companies in the western suburban area of Tokyo.

38However, locational decentralization become apparent in the 2000s and has accelerated since the 2010s, primarily because of production and distribution technological innovations and the economic recession. These changes led to the deterioration of the production environment, due to the emergent malfunction of the traditional division of labor system since the 1960s. The agglomeration disadvantage, latent until in the 2000s, has made it difficult to reconfigure the division of labor in response with the fluctuated conditions during last two decades. Therefore, locational decentralization away from Tokyo has allowed several animation companies to emerge that are able to produce high quality animations using their in-house trained skilled-workers because they can avoid agglomeration disadvantages- that is, lock-in.

39These findings, empirically, give another perspective to the geographical research on the Japanese animation industry which is likely to pay attention to the dichotomy of globalization and clustering. Interestingly, although place-specific “institutional thickness”, which includes both institutional arrangement (e.g. local governments, business associations, and labor unions) and institutional environment (e.g. certain rules, norms, and conventions) (Amin and Thrift, 1994), is generally crucial to enabling the agglomeration of creative industries to effectively function (Doeringer et al. 2013; Hanzawa and Yamamoto, 2017), policies and the public organizations like institutional arrangement have played little roles for the geographical dynamics of the Japanese animation industry. Such relative thin institutional situation little related to the geographical phenomena, which was also observed within the Japanese videogame industry’s agglomeration in Tokyo until at least the first half of the 2000s (Hanzawa and Yamamoto, 2017), differs from those of the other countries’ animation industries such as U.S.A (Scott, 1984) and China (Li, 2011). However, despite the place-specific institutional thinness in this industry, the agglomeration of Tokyo is not spatially unbound networked communities but spatially bound true cluster (cf. Darchen, 2016) because non-Tokyo locating enables some animation companies to distance themselves from the communities such as “Anime-mura (Anime village)”.

40Theoretically, firstly, the world’s popularity of the Japanese animation industry implies that institutional thickness within the industrial agglomeration would not definitely crucial to creative industries’ competencies. If this premise is true, we need more focus, in order to grasp the geographical dynamics, on other location factors. For example, tolerance for “redundancy” – a diverse range of often indistinguishably similar outputs, most of which end up as commercial failures –, critically important for innovation in the creative industry, is facilitated by spatial agglomeration (Hanzawa and Yamamoto, 2017), but over-producing animation works beyond the rational capacity of the animation companies led to the deterioration of the production environment and the decentralization in Japan. Balancing between the diversification of products critical for creative innovation and the control of oversupply for sustainable production is a difficult problem and deeply related to the geographical dynamics. Secondly, the issue of regional lock-in requires a focus on the relocation strategies of individual companies as research on lock-in has often been based on regional policy perspective though locational change is popular strategic options for a company. From the standpoint of regional policy makers, the most important issue related to regional lock-in is to revive a declining region; however, this paper indicates that it may be possible to attract companies that wish to escape from a locked in region and to become not just subcontractors but true independent companies.

41Although Japanese creative products (e.g. console videogame, manga, and anime) are globally popular, the Japanese creative industries have been unable to successfully monetize their products in foreign countries. For example, many people in the United States have watched manga and anime on websites without payment (e.g., fansub sites and YouTube). Therefore, with few exceptions, Japanese distributors and production companies are primarily domestic-oriented so far. However, recent global distributors such as Netflix and Amazon Prime have begun to invest in the animation projects produced by some prominent animation companies (e.g., Polygon Pictures, Production I.G., and Bones), which has begun to once again change the Japanese animation industry production environment and distribution channels. If these distributors continue to grow, the globalization perspective, on the one hand, will be more important to grasp the geography of the animation industry; on the other hand, the locational decentralization will become more important perspective because non-Tokyo location strategy could provide animation companies with the fundamentals allowing them to have greater freedom to negotiate with global distributors.

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1 For example, Japanese top 3 animation studios based on sales — Toei Animation, Sunrise, and TMS Entertainment (Takahashi, 2014: 55) — are surely dependent, though owned by not the multinational majors but the Japanese entertainment companies: Toei Company, Bandai Namco, and Sega Sammy.

2 Other influential animation companies, Tatsunoko Production and Tokyo Movie—successor at present is TMS Entertainment—being new entrant after the emergence of television market, also located their production studio in the same area.

3 Such situation has become widely known due to the recent reports by the press too (e.g., Margolis (2019) and Laubie and Gibbons (2019)).

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Table des illustrations

Titre Figure 1. Animation production flowchart
Légende Processes colored in gray were digitalized in the 2000s.
Crédits Source: Dejitaru Kontentsu Gyou Koyou Koudoka Kondankai (2007), Anime Jinzai Ikusei Kyōiku Puroguramu Seisaku Iinkai (2008a, b), Kamimura (2009).
Fichier image/jpeg, 84k
Titre Table 1. Number of workers on one animation product
Crédits Source:​collections/​content/​info:ndljp/​pid/​10955904/​​policy/​media_contents/​downloadfiles/​producer/​New_Folder/​3/​03-17.pdf
Fichier image/png, 224k
Titre Table 2. Location of the animation establishments in Japan
Crédits Source: AJA (2014, 2018).
Fichier image/png, 54k
Titre Figure 2. Locations of animation industry establishments (2009) in the Tokyo region
Crédits Source: 2009 Economic Census of unpublicized individual data.
Fichier image/jpeg, 149k
Titre Figure 3. Number of animation titles for packaged video media released in Japan
Crédits Source: Annual Editions of A research for Information and Media Society.
Fichier image/jpeg, 65k
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Seiji Hanzawa, « Geographical dynamics of the Japanese animation industry »
Netcom [En ligne], 33-3/4 | 2019,
mis en ligne le 06 février 2020,
consulté le 25 février 2020.
URL : ; DOI :

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Seiji Hanzawa

Department of Sociology and Social Work, Meiji Gakuin University, 1-2-37, Shirokanedai, Minato-ku, Tokyo 108-8636, Japan. E-mail :

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