Kadokawa recently published its financial results for the first quarter of the fiscal year (April to June 2026). According to the report, the company saw an operating loss of 660 million yen (roughly $4.14 million USD) in its anime and live-service business.
It’s worth noting that this doesn’t mean Kadokawa-published anime have been performing poorly. Segment revenue actually grew by 27.4% year-on-year for anime, and by 22.8% for live-service shows. The company especially highlighted the strong global and domestic performance of anime titles like Re:Zero, Classroom of the Elite, and The Barbarian’s Bride.
However, Kadokawa says segment-wide profitability “declined significantly due to the ongoing rise of anime production costs.” This has been something of a tendency in Japan’s anime industry in recent years, referred to by Teikoku Databank as a “profitless boom” where anime grows increasingly successful and in-demand, but the expenses of making it leave production companies with declining profit margins or even losses.
Another recent example is IG Port, the parent company of famous anime studios Production I.G and Wit Studio, which saw an operating loss of roughly $8.22 million in its anime business in the fiscal year ended May 2026. The company likewise cited growing revenue, which was outpaced by ballooning anime production costs, specifically expenses related to manpower, CGI and outsourcing. Similarly, Spy x Family studio CloverWorks has seen widening financial losses in the past two fiscal years, and so has studio SilverLink for the past three years.
Going back to Kadokawa, the company says the number of anime titles it’s directly involved in as lead producer or co-producer is on course to increase from the second quarter onwards, which is expected to further drive revenue. Also of note, the company’s anime segment will start seeing a reduction in expenses of around 200 million yen ($1.25 million) from the next quarter onwards – a result of the voluntary redundancies (workforce downsizing) Kadokawa conducted earlier this year.
Anime studio bankruptcies and closures continue to rise for third consecutive year in Japan
