Japanese anime production company Studio KAI has announced that it recorded a net loss of 565 million yen (about $3.54 million USD) in the fiscal year ended December 2025. As reported by GameBiz, the company now faces insolvency due to the widening deficit throughout the years.
A subsidiary of ADK Emotions and a full-fledged member of the Japan Animation Association, Studio KAI has been around since 2019. Notably, the company was the primary animation studio for the second and third seasons of the Umamusume: Pretty Derby TV anime series, as well as 2025’s Sentenced to Be a Hero anime adaptation.
Counting 133 employees as of December 2025, Studio KAI is known for housing a large number of industry veterans and doing a high proportion of its production in-house (as opposed to outsourcing) thanks to its philosophy of hiring animators as full-time workers (source: Famitsu). News of the company’s large-scale deficit and insolvency has been shocking for fans in Japan, especially considering the high quality of the studio’s output. Sadly, Studio KAI is far from the only anime company that’s struggling financially, as 2025 brought the third consecutive year of growing anime studio bankruptcies and closures.
Black Lagoon director’s anime studio Contrail to be absorbed by MAPPA amidst financial losses
It’s ok they will be replaced by ai🤷♂️
Okay buddy
Meanwhile crunchyroll gets to increase subscription fees and line up their pocket. We need a way to directly support creators instead of greedy publishing companies
Maybe try watching anime without pirating it and then those studios might make more money?
Hence why they said we need a way to directly support creators rather than putting it through Crunchyroll’s enshittification.
Absolute disaster
How can such a wildly successful anime series lead to a studio closing down? Were there too many people pirating the episodes? Or was it really just that hard to stay profitable and anime even with such success?
It’s usually licensing fees & that most profits getting split between the production committee, which the anime studio isn’t a part of usually & if they are, they have a minor share in it, since Anime studios are just contractors.
So most anime studios are working in the red because they’ll create something cool but won’t see much profit from it and in order to stay afloat, they need to make more to cover their losses.. but this gap only ever gets wider & wider.
This is why WiT Studio stopped working on Attack on Titan. They worked incredibly hard for little-to-no profit.
I can explain it. What is happening is ever since 2024 Anime Studios have been approving way too many Anime Licenses to the point where there is not enough animators to animate everything the writing was on the wall with Nier Automata and Aniplex. They are prioritizing quantity over quality to where we are beginning to see a ton of Anime slow to a crawl much like JoJo Steel Ball Run, KomeKami Girls, Fate Strange/Fake where they have an episode out and they do not know when the next one will be, or they have no episodes out and it’s past their two week deadline, or it’s “whenever we animate it”.
We are also seeing a huge drop-off of Animators as a whole from the industry due to bad working conditions and too many Anime licensed that they are burning out at once. So essentially because there is not enough animators and deadlines approaching it means the companies are either going to be bankrupt, slowly animate an episode for a month or essentially consolidate into a bigger company.
And Jojo fans are throwing a hissy fit at Netflix for it. Don’t get me wrong, Netflix is still a bad company but Good God! This is a whole nother level of batshittery from Jojo fans, they’re literally tried to curse the CEO/company with graphic images of Johnny Jostar! Some even targeting David Productions. It’s like they cant comprehend that animation takes a long time and that there’s a current crisis in the industry rn. It’s so embarrassing!
Sentenced to be a hero is one of my favorite anime series of this years and to hear this is devastating. I wish every anime team had a donation feature so we can support then.
I recently heard that Japan has a fund for the arts to help media productions out (probably as a soft power thing) and anime studios get a ridiculously small cut, with live action films eating a huge chunk (I don’t recall the percentages but it was something like 3% for anime and 60% for films). If Studio Kai is doing their work in house rather than outsourcing, and providing long-term jobs rather than gig work, then I can’t imagine they wouldn’t be deserving of of a grant from that fund to help them out a bit.
May be some bias on my part, as a long time anime fan, but I think the global cultural impact of anime is perhaps larger than that of Japanese live action films.
Also, seeing the quality of their work, I think most of us are not surprised to hear this news.
If revenue is higher than ever, maybe it’s time for those production companies, rights holders, streaming companies, and Sony to give some of that to the studios (though they’d probably raise prices on us to maintain their profit margin…).
I do think this is a warning sign of the future right now. A lot of Anime are in trouble, we are hearing about Animators burning out, Anime Companies approving so many Licenses that there is not enough Animators per each Anime, and that the working conditions are not the best. I largely believe that we will begin to see Bankruptcy and consolidation into bigger companies like Bandai Namco Pictures, Toei, Peirrot, Kadokawa, and that the middle and bottom half of the Anime Industry will be hollowed out and the big push to Southeast Asia being the final goal for 2030-2040.
Unfortunately this means that a lot of the industry is in for a dramatically huge correction in the upcoming few years, and we will be under the same censorship Video Games have suffered overall because a lot of these companies will copy and paste all the censorship laws from all the SEA countries to push Anime there to fit within their guidelines.
And no one will bail them out. There seems to be a design in place to create like in the West a situation of continued consolidation until only so many studios exist and under the control of Sony or another.
Either Japan’s government is acting too late to prevent this or can’t prevent it. It could also be that KAI had hits too late because most work was eaten up by MAPPA or another. It’s amazing how unstable the industry is and only now is anyone doing something about a huge cultural industry as if Japan never noticed. The money was going somewhere that little concern was given long as it was.
Anime houses need to diversify there assets to survive, we are still on the post COVID curve which has been brutal for many, especially in the video game industry. Expand your portfolio, move into direct to web, claim as much government assistance as possible, merchandise. Control your income rather than getting locked into individual series which are high risk for these types of studios.
Sentenced to be a hero came out in 2026. So fiscal year data ending in December 2025 shouldn’t reflect how that show performed.
I know the Japanese fiscal year ends April 1st though, so maybe that’s what they meant.
If this article is actually referring to a fiscal year ending in December 2025 then that kinda makes sense cause… well have you seen their 2025 lineup? Wasn’t all too stellar.
Huh hells teacher nube was good
Sentenced To Be A Hero released in 2026, but production of the show happened well before December 2025, so it lines up with being included in Studio Kai’s financial report for December 2025.
It’s hard to say what cause the insolvency, a year in net loss should not happen. They must have cash flow problem and difficult to pay back the liabilities. Since Sentenced to be a hero new season was already announced I think restructuring is in effect.
Damn it