Kadokawa, one of Japan’s biggest manga and anime publishing names, has pointed to a very familiar problem: when everyone keeps chasing the same “sure-win” formula, eventually the magic runs out.
According to its March 2026 fiscal earnings report, Kadokawa recorded a 51.3% drop in operating profit compared with its March 2025 report. The company linked that fall to what it described as an “excessive reliance on existing winning patterns” and a strong bias toward “Isekai-type works.”
In simple terms: too many isekai, not enough fresh hits.
For anime fans, this is not exactly shocking lah. Isekai has been everywhere for years — reincarnated as this, transported to that, overpowered hero in another fantasy world, uncle running a shop in another dimension, and so on. Some of these shows are genuinely fun comfort food. But when the genre becomes a production shortcut, audiences can feel the copy-paste energy from episode one.
Kadokawa itself said this strategy led to more titles that lacked originality or quality, and did not produce new breakout hits. Kotaku highlighted examples such as A Harem in a Fantasy World Labyrinth and The Daily Life of a Middle-Aged Online Shopper in Another World as part of that wider wave.
The funny part? Kadokawa also publishes Isekai Quartet, a crossover series built around the fact that it already has so many isekai franchises under one roof. Bro, when your own joke becomes your business problem, memang kena reflect.
Why Malaysian and SEA fans should care
This is not just a Japan-side corporate issue. Kadokawa’s output influences what anime gets adapted, licensed, streamed, merchandised, and pushed across the region. For Malaysian fans scrolling through seasonal anime charts, this is why every new lineup can feel like it has five different fantasy-world shows fighting for the same slot in your watchlist.
When big publishers lean too hard into one trend, SEA audiences get less variety too. Instead of more sports anime, sci-fi, horror, romance, grounded drama, or proper game-related stories, the market gets flooded with “safe” concepts that look familiar on paper but do not always stick.
That matters for local anime culture. Malaysian fans are not casual only — we have con-goers, cosplayers, figure collectors, manga buyers, Discord watch parties, and people who actually follow studio and publisher news. If the pipeline becomes stale, the community feels it. Less exciting seasonal chatter, fewer characters people want to cosplay, fewer series that survive beyond three months of hype.
Anime is having its live-service gaming moment
The comparison to gaming is painfully clear. Publishers in games spent years trying to chase live-service money because Fortnite proved the model could be massive. Then everyone jumped in, the market became crowded, and many projects failed to find long-term players.
Isekai has a similar issue. The genre worked because it was easy to understand, easy to market, and full of wish-fulfilment hooks. But once the shelf is packed with near-identical premises, the audience starts asking: why should I care about this one?
Kadokawa’s situation also has an extra layer because it holds manga publishing rights for Sword Art Online, while Sony — one of Kadokawa’s major shareholders — owns the anime publishing rights. Sword Art Online helped make trapped-in-a-game and alternate-world stories huge for a new generation of anime fans. Now the industry is dealing with the downside of everyone chasing that energy too hard.
To be clear, isekai is not dead. The best ones will still hit because strong characters, smart worldbuilding, and good production always matter. But the lazy versions? Those are getting harder to defend.
For fans in Malaysia and SEA, this could actually be a good sign. If publishers start realising that formula alone cannot carry profits, we might get more risk-taking, more genre variety, and fewer shows that feel like they were generated from the same fantasy RPG template.
And honestly, that would be healthy for the scene. Isekai can stay — just don’t make it the whole menu.
Source: Kotaku