Could there be another bubble? Krystallina investigates.

With news like Kodansha Comics licensing Chihayafuru or Crunchyroll’s celebrating 1 million members, it seems like the anime and manga companies are just booming. But could this so-called boom end more quickly than we think?

Factor #1: The Current Retail Economy

There’s been a lot of talk about the economy. By most accounts, the U.S. is doing well, with unemployment down to 4.7% in February.

But while this is definitely good news, not all areas are feeling the boom. Stores like GameStop and F.Y.E. had poor holiday sales, and Barnes & Noble’s forecast for the financial year is predicted to be worse than previously expected. Viz Media’s Senior Director of Sales and Marketing noted that the company has concerns about a “soft” start to this year:

“From talking to the retailers, they say store traffic is off a bit, and sales are down.  We’re noticing it pretty much across the board.”

Ouch.

But these entertainment stores aren’t the only ones with bad news. Even major retailers like Target aren’t immune to slumps, let alone some the fact that “nearly 1,700 store closures have been announced since the start of the year by companies including Macy’s, JCPenney, hhGregg, Staples, and others.” One analyst even projects that a third of all malls will close in the coming years.

“Yeah, that’s terrible,” some of you may be saying. “But it’s not like much anime or manga merchandise is sold at stores like JCPenney or Sears…”

That’s true. You might find some Yo-kai Watch shirts or Pokémon lanyards at most department stores but not much else.

However, the mall problems are much more disconcerting. Yes, of course, when stores close that all the laid-off workers won’t be able to order their favorite titles. But even smaller cutbacks can cause a big ripple. If Barnes & Noble’s sales are down, they’re probably going to order less to stock in their stores. That means less manga and related merchandise on the shelves, which in turns lead to fewer purchases, which leads to less sales, which leads to less merchandise on the shelves, and so forth. F.Y.E. is one of the few stores to stock anime merchandise like T-shirts and plushies, and both they and GameStop allow customers to trade in their old media for new ones.

And stocking merchandise at stores does help. Here’s a series I never had heard of until one day I found this DVD at Walmart:

Fullmetal Alchemist DVD 1
I wonder how long it would have take for me to discover Fullmetal Alchemist without Walmart…

Of course, this was years ago. I had never heard of Fullmetal Alchemist before, but the fact that it was an anime DVD at Walmart caught my attention. (The Square Enix logo on the back didn’t hurt either.) I’m sure a lot of you have similar stories.

Factor #2: Increased Competition

“Well, I buy from the Internet anyway! It’s cheaper!”

Yes, buying stuff online is often cheaper. Less overhead and more competition keeps prices down. This past holiday season, stores like Target and Barnes & Noble posted incredible gains in their online divisions, but this wasn’t enough to counter the decline in brick and mortar sales. Besides, Amazon still is consumers’ first choice for online shopping.

There’s also the issue that Amazon — and most web stores actually — have too much for sale. Imagine if I said you could buy any one manga at your local bookstore. Might be a difficult decision, but what about if you instead could buy any book? It gets harder. Now imagine I told you you could buy any book on Amazon. You could be searching for days. This condition is called choice overload. While some doubt its prevalence, I’m sure most of you have found it harder at one time or another to, say, write a paper on anything versus being told what to write it on.

In short, there’s almost too many choices, and it’s often hard for a title to stand out among the crowd, and the abundance of titles means people feel like they can put off buying them.

But the amount of choices also keeps increasing. Take sports manga for instance. For years, sports manga has been fairly limited in the U.S. because the companies said sales weren’t good. Now, look at what we have: Haikyu!, Kuroko’s Basketball (Viz Media), Ace of the Diamond (Kodansha Comics), Yowamushi Pedal (Yen Press). And that’s not even getting into the non-traditional sports manga like Chihayafuru. All these titles have highly active fanbases and popular anime adaptations. In a section that once was empty, you now have the major publishers competing for space on bookshelves, advertising, and sales. While an anime fan could easily watch all of these series for free on Crunchyroll, a good number of manga fans will have to face a choice…

Unless, of course, some end up in choice overload and pick “none of the above”…

Factor #3: The Current Political Climate

One of Trump’s current goals is to renegotiate NAFTA. While Mexico has been the main focus, Canada will almost certainly come to the table as well. Take a look at some of your anime and manga. Lots are stamped with “printed in Mexico/Canada”. If companies keep their manufacturing costs across the border, there’s likely to be import taxes that will be added on to the final costs. If printing is moved to the U.S., costs are still likely to increase either because of a) higher operating costs or b) costs associated with general relocating. Trade wars could also affect conversion rates, and whether a 100 yen is equal to 87¢ or $1.20 makes a huge difference when talking about thousands of dollars in licensing fees.

Oh, and like the executives at Barnes & Noble and Viz Media mentioned, the current state of politics has left a lot of people feeling a bit uncertain. Consumer confidence was up higher than expected, but January’s was lower than expected. March could go either way.

Will the Bubble Burst?

The manga and anime bubble burst in 2008 due to a number of factors, there are good reasons to believe a crash like that won’t happen again. But I do wonder if this level of growth can continue…

What do you think? Do you think the industry will continue to grow, or is there a threat of a huge slump?