Image: Studio Gainax

The studio behind two iconic mecha sci-fi anime has filed for bankruptcy after 40 years in the industry

Renowned animation studio Gainax, the studio behind massive anime hits "Neon Genesis Evangelion" and "Gurenn Lagann" has filed for bankruptcy after almost 40 years in the animation industry.

For casual anime fans, this may come as a surprise, but for veteran fans who’ve been following the ins and outs of the industry, this was a long time coming.

But what led to this sad conclusion for Gainax?

Gainax Co., Ltd., formerly named Daicon Film, was a Japanese animation studio founded by Hideaki Anno, Yoshiyuki Sadamoto, Hiroyuki Yamaga, Takami Akai, Toshio Okada, Yasuhiro Takeda, and Shinji Higuchi in December 1984. The studio focused on creating sci-fi animated shorts centred around a girl in a bunny suit fighting various sci-fi creatures from established titles like Ultraman, Godzilla, all the way to Darth Vader.

Later on, Daicon Film would rename itself as “Gainax”, and work on its first commercial entity “Royal Space Force: The Wings of Honneamise” (1987), which propelled the studio to critical acclaim, but without any of the commercial success that could guarantee a more stable financial output.

It’s no secret that Studio Gainax has been plagued with financial issues since its conception. Although the studio produced high-quality animation during its early years, the budget was just too tight for their directors or animators to work around. Financial issues are going to be recurrent in much of Gainax’s later years.

The saving grace that would keep Gainax afloat during the 1990s came from director Hideaki Anno’s mecha sci-fi brainchild Neon Genesis Evangelion, a widely acclaimed, critically lauded, and celebrated work that has cemented itself as one of the best anime to ever come out in history.

Although the show was quickly building up a rapport with its growing viewer base during its airing, the production team greatly struggled with the budget to produce high-quality content– the result of previous failed ventures by the studio. The struggle would come to a head when in the end, the main sponsor for the show pulled out of production, leading to the creation of one of the most controversial finales in anime history.

The term “Gainax Ending” pointed towards the lower quality endings that the studio was forced to create after facing innumerable budget constraints. The last two episodes of Neon Genesis Evangelion reused various clips with different dialogue in a pseudo-intellectual, vaguely philosophical self-introspection for the main character Shinji Ikari without any viable resolution to the overarching plot.

Even though this bummer of a finale did sour Neon Genesis Evangelion to its viewers and critics, Hideaki Anno’s animation masterpiece seemed to be the key to finally lift Gainax up and away from its financial issues.

The massive earnings Neon Genesis Evangelion raked in did eventually give us a more satisfying ending in the 1997 movie Neon Genesis Evangelion: The End of Evangelion, and it seemed like Gainax was finally out of the red and into greener pastures with its monumental success… well that is until it was found out that the studio committed tax evasion.

In the aftermath of the investigation against Gainax, company president Takeshi Sawamura and tax accountant Yoshikatsu Iwasaki were ultimately arrested and jailed for accounting fraud in 1999, having “failed” to pay at least 560 million yen ($3,563,952.00 today) in corporate taxes.

Besides the tax fraud, Hideaki Anno also alluded to the unfair working conditions and haphazard and “wasteful” spending in Gainax in an exclusive interview with Japanese online magazine Diamond, which eventually led to his Creator’s Break and depression, and later on to his departure from the company in 2006. Anno immediately established his own animation studio, Studio Khara, bringing with him the intellectual property rights of Neon Genesis Evangelion.

Gainax did get a chance to create three more acclaimed titles in “FLCL” (2000) “Gurenn Lagann” (2007), and “Panty & Stocking with Garterbelt” (2010), but never again did they taste the acclaim they got from Neon Genesis Evangelion. Gainax eventually lost the IP rights to Gurenn Lagann and Panty & Stocking with Garterbelt in 2021 to Studio TRIGGER, which was formed in 2011 after the departure of Gainax key member and director Hiroyuki Imaishi.

The End of Gainax

The 2010s proved to be an even more tumultuous time for Gainax, as the studio began to face a number of lawsuits against them that ultimately led to its closure, as well as poor business decisions that impacted their already terrible finances.

In 2015, Gainax established Fukushima Gainax, a new managing company that was to manage a studio and museum in Miharu, Fukushima. The idea was made into fruition to help tourism in the region, which suffered greatly because of the previous Fukushima Daiichi nuclear disaster in 2011. However, in the same year, Fukushima Gainax became independent from Gainax and would later on be renamed to Studio Gaina.

In 2016, Japanese newspaper Mainichi Shimbun reported that Studio Khara sued Gainax for 100 million yen ($636,300.00 today) in unpaid royalties from income earned on properties that Hideaki Anno worked on during his tenure. The lawsuit alleged that Gainax delayed the royalty payments and incurred a large debt with Khara, which previously had loaned 100 million yen in August 2014, but had yet to receive payment. The suit was ruled by the Tokyo District Court in favor of Khara, ordering Gainax to pay the full amount.

In December 2019, it was reported that Gainax’s newly appointed representative director Tomohiro Maki was arrested on allegations of quasi-forcible indecency against a voice actress. The voice actress’s identity and age have never been revealed, but it is alleged that she was in her late teens when the assault and harassment occurred. The crime took place during his tenure as the representative director of Gainax International.

In the aftermath, Maki, a few board members, and the company auditor resigned from their positions at Gainax. In a report by Crunchyroll, Maki was eventually sentenced to 2.5 years in prison in 2020.

In the midst of that disastrous decade for Gainax, the final anime they would produce was a net-only animation series in collaboration with Japanese automaker Subaru called “Wish Upon the Pleiades” in 2015, which fell into obscurity as the company began to implode in on itself for the next 9 years to its closure. Effectively, Gainax had become a dead company as they entered the final years of the 2010s.

Company mismanagement and debt incurred by company executives were the biggest factor that contributed to Gainax’s closure, evidenced by the fact that Gainax filed for bankruptcy in May 2024 after being sued by a debt collection company.

In a statement on Gainax’s official website, they relate that:

　”Due to the large amount of debt created by the executives, we fell into a difficult situation, such as being expelled from the committee for non-payment of royalties and being sued for loans, and many affiliated companies bearing the name Gainax were established in local areas, represented by the executives and their associates, resulting in a large number of resignations and the loss of our animation production function as a studio.”

To have become a titan in the industry, only to fall from grace at an excruciatingly slow pace, Studio Gainax is the testament of how a studio’s success does not only rely on the talent of its production teams, but also on smart, practical, and employee-friendly business practices.

Ultimately, the callous business decisions made by Gainax executives led them to lose their powerhouse status with the many departures of key directors and animators.

True to its own trope of the Gainax End, the closure of Studio Gainax is one that a fan could say was undeserved. Gainax was a studio that dared to bend a viewer’s preconceived notion of what animation should be, producing long-enduring stories that still awe and inspire generations of fans. If only the execs had that same passion as their producers, directors, and animators, then maybe there could have been a better shot for Gainax to retain its legacy.

In the current landscape of animation where animators and directors are overworked and given low pay, the closure of Gainax should serve as a lesson to all the active studios in Japan that these alarming practices should be immediately rectified, lest they get the Gainax Ending they don’t deserve.

How Evangelion studio Gainax fell into bankruptcy