The animation department outside buzzed with activity once more.
The scratching of pencils on paper was muffled by the closed door, but the previous tension had dissipated.
Inside the President's Office, the door shut, sealing out the noise.
Eiji Yamaura took two mugs from the cabinet and poured two cups of instant coffee.
Sunrise's hospitality had always been practical.
Takuya Nakayama took the mug but didn't drink, placing it on the coffee table.
"President Yamaura, the mood in the industry has been good lately," Takuya said, leaning back into the sofa with his legs crossed. "The EVA tapes are selling like crazy, and even the GG fees for late-night slots are rising. Are our competitors outside starting to think the Golden Age of anime has returned?"
Eiji Yamaura sat down opposite him and rubbed his hands together.
"It looks lively on the surface," he sighed. "GAINAX made a fortune this time, but that's an exception. Most production companies are still in the same boat, scraping by on the meager production fees from TV stations. Companies like ours with our own IPs are doing okay, but those that purely outsource are finding it harder to survive by the day."
Takuya nodded.
"This is interesting," Takuya Nakayama said, tapping his finger on his knee. "The market is expanding, yet the people doing the work are still starving. Since the last two years of the Showa era, has the price per key frame ever gone up?"
Eiji Yamaura gave a wry smile.
"We'd be grateful if it hadn't gone down. Ever since the bubble burst, TV stations have been slashing budgets and sponsors are cutting spending. The only reason the price has held steady is because production companies are desperately propping it up."
Takuya pressed further with a sharper question.
"How many hands does a typical animation subcontract pass through before it reaches the animator?"
Eiji Yamaura fell silent for a moment before answering.
"At least two. Sometimes three. The Production Committee gives the project to a general contractor, who then passes it to a second-tier studio, which in turn outsources it to small workshops run by a few people. Finally, it lands in the hands of a freelance key animator."
"A classic case of skimming at every level," Takuya concluded. "By the time the money reaches the person actually drawing, they can barely afford a decent bowl of ramen. The bottom-tier artists don't see a cent of the IP licensing profits. A series sells billions in merchandise, yet the artists are still paid a few thousand yen per frame. If this keeps up, who's going to want to draw anime anymore?"
Eiji Yamaura had no comeback.
This was the chronic ailment of the entire Japanese animation industry.
"You know better than I do how deep the prejudice against otaku and the anime industry ran after the Tsutomu Miyazaki Incident in 1989," Takuya Nakayama continued his analysis. "The influx of new talent plummeted. After we finally clawed our way through those years, we hit the economic bubble burst. Why would young people enter this field? How long can they survive on passion alone?"
"Sega and Sunrise are commercial companies," Nakayama said, cutting straight to the point. "Commercial companies focus on return on investment, and controlling costs is part of the job. But there's a bottom line—the talent pipeline cannot be allowed to break."
Nakayama's gaze fixed on the poster of past Gundam series on the wall.
"Director Tomino is a genius, and Director Takahashi is too. But their generation has reached its limit in energy and output; they're even on the decline. You can't expect them to maintain a high-intensity output forever. The future of Gundam, the future of mecha anime, depends on the young artists currently scraping by on minimum wage."
Eiji Yamaura sat up straight.
"What is Executive Director Nakayama suggesting?"
"For all future Sunrise anime projects, including other IP adaptations Sega commissions them for," Nakayama stated his demand, "we need to establish a rule for production organization and outsourcing. A maximum of one level of subcontracting is allowed."
Eiji Yamaura was stunned.
"Only one layer? How will we handle the production capacity? Sunrise's in-house animators can't possibly absorb that much work."
"We'll deal directly with the bottom-tier studios," Takuya Nakayama explained, offering a solution. "We'll take the price difference that middleman agencies usually pocket and add it to the animators' unit rates. Sega will provide Sunrise with a special fund to optimize the outsourcing management system. We'll bring promising, high-capacity small studios directly into Sunrise's approved vendor list. Cut out the second- and third-hand resellers. When the money is right, the capacity will follow."
This move struck at the very heart of the industry's outsourcing middlemen, threatening their livelihood.
But Sega had the money, and Sunrise had the work. If they pushed this through, no one would dare object.
This would naturally elevate the animation quality of Sega-affiliated projects.
Solving the basic needs was only the first step. Takuya Nakayama turned his attention to the more distant future.
"Beyond money, we must prioritize generational training. Not just for animators, but for post-production roles like compositing and coloring."
Takuya picked up his cup of instant coffee, took a sip, and frowned almost imperceptibly.
"The trend toward digital drawing and 3D animation is already clear."
Eiji Yamaura was no stranger to this topic.
Sunrise had already discussed introducing computer-aided production, but the Finance Department had repeatedly shaken its head at the exorbitant hardware costs and software licensing fees.
"Computers still can't match the texture of cel animation," Takuya Nakayama admitted objectively. "The warmth of hand-drawn art and the dynamism of its lines are the very soul of Japanese animation. But for wide shots, grand backgrounds, and complex mechanical movements, we can definitely start letting computers handle those."
He had identified the pain point.
"The in-betweening process is currently one hundred percent manual. This forces outsourcing studios to maintain a massive, cheap workforce."
"But those small workshops can't even afford a decent fax machine, let alone a graphics workstation. It's inevitable that they'll fall behind this wave of digitalization."
"It's like many of the older animators—they can't even get used to holding a mouse, let alone drawing on a digital tablet."
"So, the youth must be the ones to make this leap," Takuya declared, setting the direction. "We need to maintain animation quality and expressive power while transitioning from a paper-based workflow to a digital one. This requires technical personnel with a cross-disciplinary mindset to lead the way."
"Sunrise has a unique advantage in this area."
"What is Sunrise best at?" Takuya Nakayama asked himself and answered immediately. "Mechanical design. Gundams, warships, artificial constructs. These are precisely the kinds of content that, in the early stages of 3D and digitization, can most easily hide technical flaws while highlighting texture."
"Early 3D technology made facial expressions on characters look stiff, but it could render sharp-edged mechs with an incredibly strong sense of metallic texture and three-dimensionality."
"Sega has stumbled through many pitfalls in 3D game development over the years, but they've also built up a solid foundation." Takuya proposed a collaboration. "From Virtua Fighter to the current Gundam Battlefield Evolution, Sega has a complete set of mature technical reserves in polygon modeling and lighting rendering. We can set up an exchange platform."
He described the vision.
"Sunrise's concept artists will go to Sega to teach our game artists how to design more dynamic action sequences and how to convey a sense of power within a limited number of frames. Sega's programmers and 3D modelers will come to Sunrise to teach your young artists how to use software to build complex mechanical models and how to create lighting and shadow effects on a computer."