Kokuhō, nominated for Best Makeup and Hairstyling
at the 2026 Academy Awards (Courtesy of NEW)

Kokuhō, nominated for Best Makeup and Hairstyling
at the 2026 Academy Awards (Courtesy of NEW)

Japan’s box office reached an all-time high in 2025, totaling JPY 274.4 billion. This growth was driven by the strong performance of the animated film Demon Slayer: Kimetsu no Yaiba – The Movie: Infinity Castle, which has grossed JPY 39.84 billion domestically as of March 15, 2026, along with the live-action film Kokuhō, which surpassed JPY 20 billion in February¹⁾. For reference, Japan recorded its highest audience attendance since the 2000s in 2019, with 194.9 million moviegoers. However, due to rising ticket prices, box office revenue peaked in 2025.

In recent years, Japanese films have been reasserting their presence in the global market, led by animation. Demon Slayer: Kimetsu no Yaiba – The Movie: Infinity Castle also known as Demon Slayer: Infinity Castle ranked second at the Korean box office in 2025. Japanese theatrical animation has been achieving notable success in Korea and across many other countries worldwide.

¹⁾ Although the top two films at the Japanese box office in 2025—Demon Slayer: Kimetsu no Yaiba – The Movie: Infinity Castle (No. 1) and Kokuhō (No. 2)—were released in July and June 2025, respectively, they remained in theaters at the time of reporting; therefore, the most recent figures were used.

Demon Slayer: Kimetsu no Yaiba – The Movie: Infinity Castle, a global box office phenomenon,
ranked No. 2 at the Korean box office in 2025 (Courtesy of CJ ENM)

Two Pillars of Japanese Cinema’s Global Success: Animation and Auteur Cinema Demon Slayer: Kimetsu no Yaiba – The Movie: Mugen Train (2020) grossed JPY 40.75 billion in Japan, becoming the highest-grossing Japanese film of all time and the first to surpass USD 500 million²⁾ at the global box office³⁾, driven largely by its domestic performance. However, as of January 3, 2026, Demon Slayer: Infinity Castle, still screening in Japan, has overtaken the top spot globally, with earnings approaching USD 800 million. All top 10 Japanese animated films have each recorded over USD 200 million, largely supported by strong domestic performance. Leading titles—including Mugen Train, The First Slam Dunk (2022), and The Boy and the Heron (2023)—have expanded their success beyond Japan into North America, Europe, and Asia. While domestic earnings still account for the majority, overseas markets have grown significantly in recent years. Asia continues to dominate in revenue share, particularly with China accounting for a substantial portion of the market.

In contrast, Japanese live-action films show a different pattern. The highest-grossing title globally, Godzilla Minus One (2023), recorded USD 113 million in revenue and stands out for its relatively balanced domestic and international earnings (roughly 50:50)⁴⁾. Most other live-action films, however, remain heavily dependent on the domestic market. Kokuhō surpassed JPY 20 billion at the Japanese box office alone, setting a new record for live-action films. Building on this momentum, it was shortlisted among 15 films for Best International Feature Film at the 2026 Academy Awards, though it did not make the final five nominees. However, its nomination for Best Makeup and Hairstyling marked an important milestone, drawing global attention to Japanese cinema.

²⁾ The global box office revenue of Demon Slayer: Kimetsu no Yaiba – The Movie: Mugen Train is estimated at USD 486–512 million, based on Box Office Mojo (IMDb) and The Numbers (Nash Information Services), with differences reflecting exchange rates, re-releases, and reporting periods.
³⁾ Global revenue refers to total worldwide box office revenue, combining domestic (Japan) and international earnings. For Demon Slayer: Kimetsu no Yaiba – The Movie: Mugen Train (2020), approximately 72% of its global revenue came from Japan and 28% from overseas markets.
⁴⁾ For reference, the highest-grossing Korean film globally is Parasite (2019), with USD 278 million in revenue and a domestic-to-international split of approximately 26:74. Other films with high overseas shares include Park Chan-wook’s The Handmaiden (2016), Decision to Leave (2022), and No Other Choice (2025), each approaching 80%, as well as Yeon Sang-ho’s Train to Busan (2016) at roughly 40:60. Such a high international share is relatively rare in Japanese live-action cinema and can be considered a distinctive feature of Korean films.

Demon Slayer: Kimetsu no Yaiba – The Movie: Mugen Train, Japan’s all-time top-grossing film
(Courtesy of NEW)

Until recently, such success was largely commercial and limited to a handful of blockbuster titles. However, Japanese cinema has begun to move beyond this. Following the international success of Ryusuke Hamaguchi, director of Drive My Car (2021), a new generation of auteur filmmakers—including Sho Miyake, Koji Fukada, Kohei Igarashi, and Chie Hayakawa—has emerged, building on the legacy of established figures such as Kiyoshi Kurosawa, Hirokazu Kore-eda, and Naomi Kawase. At last year’s Cannes Film Festival, 26-year-old director Yuiga Danzuka drew attention when his debut feature Brand New Landscape was invited to the Directors’ Fortnight section.

Since Drive My Car won the Academy Award for Best International Feature Film, global interest in Japanese auteur cinema has grown steadily. Emerging directors have been consistently introduced at international film festivals, and Japanese auteur films continue to maintain a meaningful presence globally. In Korea, Neo Sora’s Happyend (2025) became an unexpected box office hit, while Sho Miyake’s Two Seasons, Two Strangers (2025) gained further attention after winning the Golden Leopard at the 2025 Locarno Film Festival. Actress Shim Eun-kyung, the film’s lead, was named Best Actress at the Kinema Junpo “Best Ten” awards, sustaining the momentum.

Ultimately, Japanese cinema’s international presence is now emerging along two distinct axes: the expansion of an animation-centered content industry and the success of auteur-driven live-action films at international festivals. The selection of Japan as the “Country of Honour” at the 2025 Cannes Film Market (Marché du Film) reflects this shift. As one of the world’s leading film business events, the Cannes Film Market brings together industry professionals from across the globe. Being designated as a “Country of Honour” is widely regarded as recognition of a nation’s standing in the global film industry. Japan’s prominence at this event is not merely the result of recent hit films; rather, it signals that its broader content industry is once again being recognized as a major global force.

Auteur-driven live-action films Happyend (left) and Two Seasons, Two Strangers, both recognized
at international film festivals (Courtesy of JINJIN Pictures and Atnine Film)

Japan’s Animation Industry and the Rise of a Global Ecosystem The success of Japanese animation is nothing new. However, in recent years, it has achieved even more remarkable results overseas. No longer just a genre within Japan’s broader content or film industry, Japanese animation has evolved into an independent global content industry that commands a significant share of the international market.

According to Anime Industry Report published by the Association of Japanese Animations (AJA), the size of Japan’s animation industry has recently exceeded JPY 3 trillion. Overseas revenue has risen sharply since 2017, and since 2020, more than half of total revenue has come from international markets. ⁵⁾

At the core of this uptrend is a strong original IP structure. Much of Japanese animation is based on commercially validated source material—such as manga and light novels. These IPs are expanded across multiple formats, including TV animation, films, games, and merchandise, building long-term fan communities. The box office success of theatrical animation is closely tied to this ecosystem: fandoms formed through manga and TV series translate into a stable audience base upon release. In this sense, the success of Japanese animation reflects not just individual films, but the strength of a broader IP-driven industry.

The success of Japan’s animation industry is often compared to the rise of K-pop. Both are not the product of short-term trends, but the result of content ecosystems built over decades, supported by well-established industry structures and dedicated fan cultures.

⁵⁾ Anime Industry Report, Association of Japanese Animations

Japanese Content Companies’ Global Distribution Strategies Another notable shift in Japan’s animation industry in recent years is its approach to global distribution. In the past, Japanese animation was typically licensed to local distributors in North America. More recently, however, production companies have increasingly sought to manage global distribution networks directly. A key example is Sony Pictures’ acquisition of Crunchyroll.⁶⁾ In 2021, Sony acquired the anime streaming platform for approximately USD 1.1 billion, enabling it to establish an integrated structure linking animation production (Aniplex), global distribution, and streaming platforms.

Toho Co., Ltd. manages global distribution directly through its U.S. subsidiary, Toho International, while strengthening its overseas capabilities through the acquisition of North American distributor GKIDS.⁷⁾

This reflects a broader strategic shift among Japanese content companies. Rather than focusing solely on production, they are increasingly taking control of global distribution. While international buyers once sought out Japanese animation, companies are now actively bringing their content to global markets and building their own distribution networks. ⁸⁾

⁶⁾ Sony Pictures Entertainment press release, 2021
⁷⁾ Toho International / GKIDS acquisition announcement
⁸⁾ When the Japanese government (Intellectual Property Strategy Headquarters, Cabinet Office) describes the content industry as a core national sector, it often cites comparative figures: approximately JPY 4.7 trillion in overseas revenue from Japanese content, compared with around JPY 5 trillion in steel exports and roughly JPY 5–6 trillion in semiconductor exports. This highlights that the content industry has grown into an export sector on par with steel and semiconductors. The industry spans a wide range of sectors, including animation, games, music, film, broadcasting, and character IP. Source: “Japan’s Content Industry Ramps Up Overseas Market Development with Government Support,” Nikkei Asia (Partner Content)

Shifting Demographics of Japanese Moviegoers Another key factor in understanding Japan’s film market is the changing composition of theater audiences. Traditionally, the market has been characterized by a high proportion of middle-aged and older viewers, with weekday attendance often dominated by seniors. However, this demographic structure has begun to shift since the COVID-19 pandemic. While older audiences have been slower to return, younger viewers—particularly those drawn by animation—have returned more quickly, gradually reshaping the audience profile. ⁹⁾

In Japan, one of the world’s most rapidly aging societies, the COVID-19 pandemic marked a turning point: audiences aged 65 and over—who account for roughly 30% of the population—moved away from theaters, while younger viewers filled the gap, creating a clear generational shift. This shift is closely linked to the future size and composition of Japan’s moviegoing population and may also help explain the industry’s growing focus on global markets. The idea that the domestic market alone is no longer sufficient—as it once was—offers a particularly compelling perspective.

⁹⁾ Japan Center for Contemporary Culture Studies 보고서

Structural Constraints Facing Japan’s Live-Action Film Industry Despite the global success of Japanese cinema, structural challenges within the live-action film industry persist. For decades, the industry has operated under the production committee system, in which multiple companies jointly invest in a project. While this model reduces financial risk and ensures stability, it has also been criticized for limiting production scale and creative control.

The production committee system is not limited to live-action films; it is also widely used in animation. With both advantages and drawbacks, it has become deeply entrenched, making it difficult for projects to succeed commercially outside of it. One company challenging this model is K2 Pictures, whose lineup includes works by internationally recognized directors such as Takashi Miike, Hirokazu Kore-eda, Shunji Iwai, Miwa Nishikawa, and Kazuya Shiraishi. However, industry reactions remain cautious. While some support its launch of the “K2P Film Fund” and its ability to attract capital from the financial sector—enabling more diverse and bold production approaches—others argue that further observation is needed in an industry historically slow to change. Given the nature of the film business, where a single hit can have far-reaching effects, expectations are high for Kore-eda’s upcoming Look Back, a live-action adaptation of the 2024 animated film.

Look Back, directed by Hirokazu Kore-eda and produced by K2 Pictures, is set for release this year
(Courtesy of Megabox Instagram)

Labor conditions in Japan’s film industry remain a persistent issue, with long working hours and low wages widely recognized as structural challenges. In recent years, efforts have emerged to improve conditions on production sets, including a certification system that awards the “Eiteki” mark to productions meeting certain labor standards. While this represents an industry-led attempt to address long-standing issues such as excessive working hours, the system remains voluntary and does not apply to all productions. Given the industry’s reliance on the production committee system and a freelance-centered workforce, debate continues over its effectiveness. Nevertheless, the Eiteki mark is seen as a meaningful first step toward addressing long-standing production environment issues.

Ironically, the very issues cited as problems—long working hours and low wages—have also enabled Japan to sustain an annual production volume nearly three times that of countries such as Korea and France. Some analyses suggest this environment has contributed to the emergence of a diverse independent film scene. Nevertheless, improving labor conditions remains essential. The recent labor shortage in Japan’s film industry reflects this reality. An industry can only remain sustainable when younger staff in their 20s and 30s work alongside experienced veterans. As one on-set producer noted, “There are plenty of senior-level personnel, but a shortage of assistants. Everyone is trying to retain assistants, but younger crew members are being drawn to OTT productions, where working conditions are better. For films with budgets under JPY 100 million—which account for 70–80% of Japanese films—it has become extremely difficult to find young staff.” While change may not come quickly, it is clear that the industry can no longer avoid adapting to these shifting conditions.

Japan’s “Mini-Theater” Culture Another factor behind the steady volume of Japanese film production is its distinctive “mini-theater” culture, which differs from Korea’s independent and art-house cinema model. Although the number of mini-theaters has declined in recent years, the high volume of domestic production means securing a screening slot can take over a year. For example, The Owner of the World, directed by Yoon Ga-eun, is scheduled for release in Japan at the end of this year, despite its Japanese distributor being confirmed at last year’s Toronto International Film Festival.

At the same time, it remains a persistent challenge that even successful mini-theater releases struggle to recoup their production costs. While around 100,000 admissions is considered a strong result, it is often insufficient to reach the break-even point. Typically, 200,000 to 300,000 admissions are required, often supported by ancillary rights and overseas sales. Although a sustainable model for independent and art-house films remains elusive, mini-theaters continue to provide a vital platform for low-budget and auteur-driven films to reach audiences.

Considerations for the Korean Film Industry The recent global success of Japanese cinema cannot be attributed to a single factor. The animation sector has expanded its global influence through a strong IP-driven structure combining established fan bases with integrated platforms and distribution networks. In contrast, the live-action sector continues to face structural challenges, including its production system and labor conditions, despite success at international film festivals. Compared with animation, live-action films also show relatively weaker box office performance in Japan. While Kokuhō was a rare breakout hit in 2025, most top-grossing live-action films have typically recorded around JPY 5–6 billion annually. Despite several mid-budget successes, producers remain under pressure as they compete directly with animation in theaters. This has contributed to a more cautious outlook for the live-action market. Since the COVID-19 pandemic, the rapid growth of animation has increased theatrical releases and hit titles, making it more difficult for live-action films to secure screens.

Ultimately, the recent global success of Japanese cinema reflects not a full-scale revival of the industry, but an extension of the animation sector’s competitiveness into the film domain. At the same time, it highlights underlying structural challenges within Japan’s film industry, raising important questions for Korea’s own movie industry. Global success is not driven by a few hit titles, but by broader industrial structures and content ecosystems.

#KoreanCinema #JapaneseCinema #JapaneseFilmIndustry #Animation #GlobalBoxOffice #AuteurCinema #DemonSlayerInfinityCastle #DemonSlayerMugenTrain #Kokuhō #LiveAction