Anime has become a global powerhouse. Currently, franchises like Demon Slayer and Jujutsu Kaisen dominate pop culture. However, experienced analysts know that rapid expansion often leads to contraction. When looking at the industry’s history and current saturation, the signs suggest the bubble may shrink.
Historical Precedents for an Anime Market Correction
To understand the future, we must look at the past. Japanese animation has experienced several boom-and-bust cycles. In the late 1970s and 80s, series like Star Blazers and Robotech created a dedicated but niche following. Later, the 1990s brought a massive explosion with Dragon Ball Z and Sailor Moon.
However, this growth was not sustainable. By the mid-2000s, the industry faced a massive crisis known as the “DVD bubble burst.” The market was flooded with overpriced “singles” (DVDs containing only 3-4 episodes), and supply vastly outpaced demand. Distributors aggressively licensed niche titles, hoping to find the next big hit, but the strategy failed.
Consequently, major North American licensors like Geneon Entertainment (which abruptly ceased distribution in 2007) and ADV Films (which liquidated in 2009) collapsed. This crash left popular series like Black Lagoon briefly in limbo and caused retailers like Suncoast to slash shelf space. This history proves that an anime market correction is not only possible but has happened before when the industry overextended itself.
The Post-COVID Streaming Surge
Recently, the industry enjoyed its biggest boom yet. During the COVID-19 lockdowns, streaming consumption skyrocketed. Platforms like Netflix and Crunchyroll invested billions to acquire content. Shows like Spy x Family became instant hits because audiences were captive at home.
Furthermore, merchandise sales hit record highs. Yet, this rapid scaling has created issues. Studios are now producing more content than they can sustain. For instance, high-profile shows like Zom 100: Bucket List of the Dead faced severe production delays due to staffing shortages, mirroring the overproduction issues of the past.
Why an Anime Market Correction is Likely
There are clear indicators that the market is overheating. First, there is a glut of content. Every season is packed with dozens of generic “isekai” (fantasy) shows that struggle to find an audience. Secondly, consumer fatigue is setting in. Fans cannot subscribe to every service or watch every new release.
Moreover, labor issues in Japan are reaching a breaking point. Animators are overworked, leading to quality drops and delays. If the quality suffers, casual viewers may leave. Therefore, the industry needs to stabilize. A contraction would filter out lower-quality productions and allow studios to focus on hits. Ultimately, an anime market correction may be necessary to ensure the long-term health of the medium.
