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Post Reply The Future of Anime and Video Games
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Posted 10/12/15 , edited 10/12/15
The cost to develop anime and video games are rising with the inevitable fight against piracy. One of the main reasons piracy occurs other than it being free is due to contents not available in their respective country. There are many reasons that lead to content restrictions; however, if very little restriction or no restriction exist, then would it help in the fight against piracy or make piracy worse? Following further, many anime and video games do not profit and the damage dealt due to piracy can be seen such as lost in quality.

How do Anime generate money? - Watch this Video: https://www.youtube.com/watch?v=-AHo-_XEV6E
1. Manga
2. 3rd Party Advertisers
3. Merchandise
4. DVDs
5. Music CDs
6. Kick Start (Google It)
7. Etc...

How do Video Games generate money?
1. 3rd Party Advertisement
2. Merchandise
3. ??? I blanked out

The question rises, "Why invest when chances to return a profit are slim?" The average cost per anime episode is between 150K - 200K USD. It is expensive when it is just the average cost excluding high-end anime cost. Triple A (AAA Titles) video games greatly varies ranging from 20mil to 100mil+. New video game prices in the US cost $59.99; meanwhile, in Canada video game prices rose to $74.99.

The problem is the battle between how much consumers are willing to pay for video games versus how much the video game industry need to profit to continue production. Take a moment to think about video games possibility going the streaming route in the next generation with a monthly subscription fee as seen with Playstation Now to counteract piracy.

Anime entered the streaming option; however, unlike video games, piracy occurs where the content can be seen for free. Say, 20 years from now, will anime be an entertainment of the past due to piracy or hatred from the anime community about quality of good anime going down the drain? Anime need a way to counteract piracy successfully to generate the profit they need to continue production. How long can anime continue to rely on fans to purchase merchandise to generate profit or even break even?

I wonder about the future because I can already feel the tension and see the damages done due to piracy and rising production prices.

Please share your thoughts! I look forward to having a discussion!
abjack 
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Posted 10/12/15
I literally only came to the forum for the first time hoping there would be a topic like this around. I have a lot of the same questions and can only think of a handful of ways for the anime industry may flourish in the coming years.
1. Try to capture more of the global market. I know this one is a long shot, but it's not impossible. Look at the success of Pokemon or Dragonball (granted those were sort of "Perfect storm" scenarios).
2. The industry needs to rely more on streaming. And for Gods sake, give Crunchyroll more shows. I would like to say that CR has become the netflix of Anime, and that would be pretty accurate, but it's really not ALL the way there yet.
3. As much as it pains me to say, perhaps scaling back the amount of anime produced in favour of producing a lesser amount of quality series might be the future.
4. Production costs magically go down. I don't see this one happening soon. Even if the process is getting easier, people will always still want to be paid well.


I'll be completely honest here, I pay for CR, and more or less have with different accounts for the last 4 or so years. I do it because I'm not a big merchandise guy, I don't personally like keeping large collections of DVD's and CR sort of allows me to feel like I'm giving some kind of damn about the industry. THAT SAID. Whatever is not on CR I'm going to end up watching somewhere else. To be honest, even with what's on CR I'll tend to watch shows elsewhere simply cause I know pretty much everything I need is there. But I still keep my CR account active...

P.S. There does seem to be more shows on CR this season so I've been using it more as of late.
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Posted 10/12/15

abjack wrote:

I literally only came to the forum for the first time hoping there would be a topic like this around. I have a lot of the same questions and can only think of a handful of ways for the anime industry may flourish in the coming years.
1. Try to capture more of the global market. I know this one is a long shot, but it's not impossible. Look at the success of Pokemon or Dragonball (granted those were sort of "Perfect storm" scenarios).
2. The industry needs to rely more on streaming. And for Gods sake, give Crunchyroll more shows. I would like to say that CR has become the netflix of Anime, and that would be pretty accurate, but it's really not ALL the way there yet.
3. As much as it pains me to say, perhaps scaling back the amount of anime produced in favour of producing a lesser amount of quality series might be the future.
4. Production costs magically go down. I don't see this one happening soon. Even if the process is getting easier, people will always still want to be paid well.


I'll be completely honest here, I pay for CR, and more or less have with different accounts for the last 4 or so years. I do it because I'm not a big merchandise guy, I don't personally like keeping large collections of DVD's and CR sort of allows me to feel like I'm giving some kind of damn about the industry. THAT SAID. Whatever is not on CR I'm going to end up watching somewhere else. To be honest, even with what's on CR I'll tend to watch shows elsewhere simply cause I know pretty much everything I need is there. But I still keep my CR account active...

P.S. There does seem to be more shows on CR this season so I've been using it more as of late.


I agree how stupid it could be not to have more streaming services. I watch Overlord and Onepunchman on an undisclosed streaming site....which they get literally no money from. But if they worked in conjunction with a site like Crunchyroll, it would benefit the masses. They wouldn't complain about lost overseas revenue or have to throw their weight behind draconian japanese protection laws.

The more streaming companies there are, the better it is. Also I tried Netflix but was horribly disappointed how little content it has for the Canadian version. Crunchyroll is the only thing that saves the day for me.
Bavalt 
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Posted 10/12/15
I think services like Kickstarter are a good direction for creative industries to take. With that sort of thing, the money is literally being paid for the product itself. Not merchandise, but the actual existence of the piece in question. Not only does this help with funding, but it gives those creating a project a solid idea of how large the audience is for that idea. I think that the more prevalent crowdfunding and other methods of getting the audience involved in a project on the ground floor become, the more we'll see innovation and art within the industry really make its presence known, as the risk factor that comes with making something before you know how well it will do will be mitigated.
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Posted 10/12/15 , edited 10/12/15
DRM and other CD protection methods encourage piracy while lack of protection encourages purchasing the game. Either way they torrent but if you have DRM on your game then the pirated version will run better and less intrusive than buying the game legitly. I know I won't buy some games because of their DRM.

When Witcher 3 came out they had 2 versions. One with DRM protection that was cracked in under a day and torrented. The other was from GOG and you could copy/paste it onto a torrent, this one took a couple weeks to be put up as a torrent.

http://www.pcgamer.com/interview-cd-projekts-ceo-on-witcher-2-piracy-why-drms-still-not-worth-it/

http://www.gamespot.com/articles/witcher-3-dev-explains-how-to-turn-a-nation-of-pir/1100-6426895/
abjack 
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Posted 10/13/15

Bavalt wrote:

I think services like Kickstarter are a good direction for creative industries to take. With that sort of thing, the money is literally being paid for the product itself. Not merchandise, but the actual existence of the piece in question. Not only does this help with funding, but it gives those creating a project a solid idea of how large the audience is for that idea. I think that the more prevalent crowdfunding and other methods of getting the audience involved in a project on the ground floor become, the more we'll see innovation and art within the industry really make its presence known, as the risk factor that comes with making something before you know how well it will do will be mitigated.


While I do think this to an extent, also keep in mind the amount of unknown variables the production company would have to go through in order to get their work off the ground. This is essentially asking us the fans to all but replace sponsors/angel investors who have had years in experience with risk and rewards. I don't disagree with the notion but looking at production costs , having to raise in and around 2 Million dollars per Anime seems like a bit of a stretch to me atm. Granted I'm sure kickstarting would bypass some of the $150-$200 thousand dollar per ep production costs so it could be less, but still quite a bit.

Not that I don't love the heck of Little Witch Academia
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Posted 10/13/15 , edited 10/13/15

abjack wrote:2. The industry needs to rely more on streaming.


The current cable television model is already on its deathbed. The cable companies themselves have already acknowledged this and are adjusting their business strategies accordingly. In 10 years, the vast majority of television will be through streaming.

I foresee Crunchyroll being consumed by one of the larger players in the next few years.

On the bright side, as streaming services become dominate I anticipate broader availability of content in niche markets such as anime. I am guessing a marketing strategy closer to Amazon's streaming service. A selection of content available to subscribers, with a much larger selection available for purchase a la carte at a modest price.

Sogno- 
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Posted 10/13/15
oppai
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Posted 10/13/15
Well sometimes its not only about the money.

and video games is way different since it can be very easy thing (but done extremely well) to make it work.
while anime has a lot of other stuff going on and can't relay on others only giving a good experiance that some would like or not.
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Posted 10/13/15 , edited 10/13/15
I've always wondered as to why the companies who make certain animes "Don't make enough money from the revenue off airing it" Why don't they just start a Kickstarter project? I'm sure many people worldwide would pay to see their favourite unfinished anime be given another season or two.
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Posted 10/13/15 , edited 10/13/15

Jorvac wrote:

I've always wondered as to why the companies who make certain animes "Don't make enough money from the revenue off airing it" Why don't they just start a Kickstarter project? I'm sure many people worldwide would pay to see their favourite unfinished anime be given another season or two.

It's only a matter of time before you see more studios take this approach, with pre-sales of BD's and merchandise.

Shifting the risk from the company to the consumer will give the studios more financial freedom.

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Posted 10/13/15 , edited 10/13/15
Crunchyroll isn't the only legal place to stream anime. Funimation streams overlord, and Daisuki streams onepunch man. Personally, I recommend daisuki since they have 15-30 sec adds, while I'm not sure about Funimation, since I subscribe.

On the topic of videogames, it only makes sense that they would cost a lot when made by big names like EA or Capcom. Besides the better graphics, as well as being compatible with high tech gaming pc's and next gen consoles, these companies want to make a profit. None of us will start only playing indie games due to the relative cheapness. The fact is people love games, and they can be extremely addicting as well (which is why companies are able to sell them at such a high price). No one is going to boycott large gaming companies since in the end we don't want to be without them
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Posted 10/13/15
I only wish that there would be more shows available for everyone. U.S customers have way more anime than we europeans do. Even funimation is exclusive for u.s and canada.
I know licencing shows might be tricky, but it would mean more potential customers. I think anime is pretty popular in Europe.

As for manga industry, I hope someone makes a legal manga service. I personally like reading manga from a phone.
CR has some mangas, but not many. It's a shame that there are more manga/anime available illegally than legally.
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Posted 10/13/15 , edited 10/13/15


Still, considering the great amount of people who watched certain anime outside of Japan I bet a kickstarter campaign would be a viable option for some companies struggling to put out another season ^^
Ikitou 
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Posted 10/13/15 , edited 10/13/15
I suspect the anime industry is actually through the worst of it. There was a period around 5 years ago when there was a lot of doom and gloom - you had piracy, but no way to counter it. Now with sites like this, we do. Also, costs should be *relatively* consistent to produce anime, I'm sure there is some inflation but nowhere near as bad as it has gotten in video games. So if you lose a revenue source, you just need to replace it with something else of similar value. The games industry on the other hand needs exponentially more and more and more.

The number one rule of dealing with pirates is "make not pirating more convenient than pirating". That's exactly what services like Crunchyroll/Netflix do. They are also perfect for growing their audiences outside of Japan, and that money can then be reinvested elsewhere. Certainly DVD/Blu-Ray sales are likely to get lower and lower as the primary series will be available via streaming, and people won't want to buy a blu-ray just for the OVAs. So which areas the money comes from is probably shifting, but I think the general audience growth overseas is going to do a lot to offset the loss in physical disc sales.

Music CDs, they're going rather out of fashion as well. But we have iTunes and co. Even on the British one I can find a bunch of anime songs.

I imagine a lot of the revenue *increases* are going to come from Merchandise. Look at a company like Good Smile, who are making Nendoroids for more and more things. A few years ago the most familiar nendo to your average westerner would have been Hatsune Miku. Now we have them for Metal Gear Solid, Frozen, Batman, Avengers, Star Wars. They wouldn't be doing that if they weren't trying to support and further advance their growth in the west. Also; you can't download a figure! And bootlegs of physical items are nowhere near as appealing to your average consumer as a pirated copy of a TV show.
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