KADOKAWA’s AI Strategy for Anime: Boosting Creativity While Supporting Artists and Studio Growth

KADOKAWA’s Strategic Investment in AI for Anime Production

KADOKAWA CEO Takeshi Natsuno recently detailed the company's approach to integrating artificial intelligence (AI) into anime production. He emphasized that AI is currently a support tool rather than a creative force, noting that while AI can handle repetitive tasks, it lacks the originality essential for compelling storytelling.

With a background in IT and academia, Natsuno explained that AI relies heavily on large data sets, which leads to standardization and limits creative expression. He pointed out that imaginative works like Oshi no Ko demonstrate a level of creativity AI cannot generate on its own. Instead, KADOKAWA uses AI to assist artists, such as automating the coloring of animation cels after drafts are completed, which improves efficiency without compromising creativity.

Technology and Creativity as Driving Forces

Upon becoming CEO, Natsuno expressed his vision for KADOKAWA to become a tech-driven company. The goal is to streamline workflows using technology, allowing creators to focus on original storytelling. He likens technology and creativity to two wheels that propel the company forward, each supporting the other as they explore new directions.

Following the acquisition of Chiptune, KADOKAWA’s seventh anime studio, Natsuno confirmed the sharing of technologies and resources across the group. He highlighted the company’s strong internal capacity, with hundreds of engineers specializing in AI, to evaluate and implement AI technologies effectively. The primary aim is to use technology to protect creative freedom, not replace it.

Investments and Practical Applications of AI

KADOKAWA has set clear goals in its FY2023–2027 Mid-term Management Plan to introduce AI-based production support. This includes strengthening their group’s production studios and developing tools like Mantra, which uses image recognition and language processing to translate manga from Japanese into multiple languages. This tackles the challenge of synchronizing Japanese and international releases to reduce profit losses from unofficial versions.

Besides anime, these technological investments have improved other areas like book distribution. KADOKAWA has reduced bookstore returns of unsold titles to 26%, well below the industry average of 40%, showcasing the tangible benefits of data-driven improvements.

Industry Context: AI’s Role and Controversies

While AI remains a controversial topic among anime fans and creators, several key companies are advancing its development. Toei Animation and OLM Digital are actively researching AI’s role in production, with over 10 major companies testing these findings. Companies like KADOKAWA argue AI is essential for meeting demand and improving working conditions, though some industry voices suggest focusing on better scheduling, pay, and revenue-sharing would be more effective.

Despite the debate, KADOKAWA is expanding its anime production capabilities. With an animation business expected to generate over $245 million in 2024, the company launched the Studio Business Division in April 2025 to consolidate its seven studios. This division also supports ongoing acquisitions and aims to increase anime output for TV, streaming, and theaters.

Consolidation Strategy: Strengthening the Industry Through M&A

Natsuno addressed the urgent need for mergers and acquisitions (M&A) in Japan’s anime industry. He noted that many studios remain small and family-owned, limiting their growth and global reach. KADOKAWA offers these studios stability by handling non-creative tasks such as sales, marketing, and HR.

By joining the KADOKAWA group, studios can concentrate solely on their creative work without the burden of administrative responsibilities. Natsuno stressed that industry-wide consolidation is not just KADOKAWA’s goal but a necessary step for the industry's stability and growth.

Focus on Creative Freedom

KADOKAWA’s approach emphasizes supporting creators with technology and infrastructure rather than replacing them. Natsuno’s vision is clear: provide a foundation that allows studios to thrive creatively while benefiting from the group's resources and scale.

For creatives interested in the evolving intersection of technology and storytelling, understanding how AI tools fit into production workflows is essential. Exploring courses on AI and creativity can provide practical insights and skills to navigate this changing landscape. Check out Complete AI Training’s courses for creatives to stay informed and prepared.