Whenever a report on working conditions in the anime industry comes out, the conversation ends in the same place: animators earn little and something must be done. Takeshi Natsuno, CEO of Kadokawa, doesn’t deny this. He says it’s the wrong symptom to diagnose the real problem, and that while the industry keeps looking there, the fundamental solution will never come.

The real problem isn’t salary, it’s structure

During a discussion about the future of Japan’s content industry in April, Natsuno was direct: Japan has too many small anime studios, and that’s what’s killing the sector’s profitability. Each small company comes with its own president, executives, sales team, and administration. Multiply that by the number of studios and you get an industry where a huge portion of money goes into duplicating functions that could be shared.

To illustrate the scale of the problem, Natsuno used an example from his own sector. Kadokawa, as one of Japan’s largest publishers, controls only 20% of the publishing market. The remaining 80% is split among dozens of smaller competitors. If that fragmentation is already a problem in the book industry, in anime—where margins are tighter and production costs keep rising—the situation is considerably worse.

Natsuno’s concrete proposal is company mergers. He gave a simple example: if Kadokawa merged with seven other production studios, seven presidents would become unnecessary immediately. Seven sales teams, seven administrative departments, seven overhead structures that could become one more efficient unit. It’s not a new idea in other industries, but in the anime world, where studios are often very personal projects of their founders, it’s a conversation that makes people uncomfortable.

The CEO was also clear about what he doesn’t want: government subsidies. His position is that public policies should create incentives for voluntary private mergers, not for the state to plug gaps with money. He mentioned models like Hollywood studios and companies like EA, where creative and business sides are clearly separated, allowing creators to focus on content without worrying about capital or commercial operations. That’s the model, in his view, that Japan’s industry should aspire to.

The underlying issue is that anime profitability is already falling, according to Natsuno himself, making structural reform urgent and not a theoretical exercise. His stated ambition is for the anime industry to have an economic weight comparable to Japan’s automotive sector, but for that to happen, it first needs to stop operating as an ecosystem of micro-businesses competing with limited resources.

Kadokawa Corporation is one of Japan’s entertainment giants: publisher, anime producer, video game developer, and global content distributor. Among its most known properties are franchises like Sword Art Online, Re:Zero, KonoSuba, and Oshi no Ko, as well as being the company behind Elden Ring through its subsidiary FromSoftware. It’s no neutral stance: Kadokawa would be one of the main beneficiaries, and possibly the driver, of any merger process in the sector.

Do you think merging small studios would improve anime quality and conditions, or is the industry’s charm precisely in that diversity of independent voices?