Creating top-tier animation comes at a very high price, and the anime industry is feeling it directly. IG Port, the massive parent corporation housing heavyweights like Production I.G and WIT Studio, has just published its financial results for the fiscal year ending in May, causing concern. While overall animation sales increased, the company reported a sharp drop in operating profits, confirming that the animation business is facing a severe crisis due to production costs.

Although the company generated over eight billion yen in sales, losses were significant. The video division recorded an operating loss of over one billion yen, dragging overall corporate profits down by 46.3% year-on-year. The direct cause? Endless delays and excessive price hikes across all creative areas. Executives noted that paying fair wages, covering costly CGI scenes, and relying heavily on subcontracted animation studios have driven budgets so high that several projects are projected to spend more than they will earn, forcing emergency funds to mitigate the impact.

Luckily, other divisions prevented total disaster. Copyright management and publishing kept the company afloat, cushioning the financial collapse. Sales of official merchandise also showed positive numbers, though they failed to meet the huge internal targets set by management. However, the outlook for the coming months remains grim, with profits projected to drop another nearly 25% by May 2027, proving that high global demand for Japanese series is useless if companies can’t control cash bleeding in their schedules.

With even elite studios struggling to bear the immense economic burden of producing high-quality episodes, do you think production committees will start demanding budget cuts and drastically lowering visual quality in upcoming seasons to survive this relentless crisis?