Isekai Is Dying: Why Kadokawa Admitted the Genre's Overreliance Is Backfiring

Isekai Is Dying: Kadokawa's Admission Changes Everything

Kadokawa, one of Japan's largest entertainment conglomerates, admitted in its 2026 earnings report that its growing dependence on "safe" and familiar anime trends — especially isekai and Narou-kei stories — has started hurting the company's business performance. The result: a 51.3% decrease in profit attributed to overreliance on "proven genres."

Key Takeaways

• Kadokawa reported 51.3% profit decrease in fiscal year 2025
• Overreliance on isekai and Narou-kei stories cited as primary cause
• The company plans to rebuild genre strategy and approve fewer formulaic projects
• 30+ isekai titles per season has saturated the market
• Original anime IP and vintage manga adaptations are replacing isekai as the industry's focus

The numbers tell the story

TO Books, a major Japanese light novel and comic publisher, experienced "stronger-than-expected" content sales over the last 11 months, but the growth came from non-isekai titles. The company revised its earnings forecast upward, with overall sales projected to spike from 11 billion yen to 11.3 billion yen — a 6% growth rate.

Meanwhile, Kadokawa's animation business saw Q1 to Q3 net sales visibly lower for fiscal year 2025 compared to 2024, despite a higher number of new titles. More isekai didn't mean more money.

Kadokawa specifically pointed to "excessive reliance on existing winning patterns" — isekai and Narou-kei stories originating from the Japanese self-publishing website Shousetsuka ni Narou — as the biggest offenders.

Why isekai ate itself

Isekai was a relatively niche genre until Sword Art Online showed the world just how good it could be a decade ago. Between 2015 and 2025, isekai's rise was incomparable. But the genre's overwhelming success became its downfall.

Because isekai is so popular, scores of isekai series were animated. Production companies saw it as a winning formula — ordinary person gets extraordinary powers, explores a fantasy world, accumulates a loyal following. It was power fantasy distilled to its purest form, and it sold incredibly well.

But the formula became stale. Too many below-average series were produced, and fans grew tired of what isekai came to represent. What was once a genre that encapsulated joy, wonder, and amazement became home to stale, overdone premises and characters that lacked any originality whatsoever.

What's replacing isekai in 2026

Three major trends are reshaping anime in the wake of isekai's decline:

1. Original anime IP is back

Goodbye, Lara from Kinema Citrus isn't based on a manga or light novel — it's an original story conceived specifically for animation. Studios are betting that audiences want stories they can't predict, stories that don't come with manga spoilers already circulating on social media before the anime even airs.

2. Vintage manga revivals

Kadokawa is pulling legendary manga out of the vault — Liar Game and Red River are getting anime adaptations for the first time. These are titles with proven stories, beloved characters, and zero reliance on the isekai template. The passion is already there; they just need quality production.

3. Non-fantasy genres are rising fast

Akane-banashi proves that a show about traditional Japanese rakugo storytelling can be one of the most gripping anime of the season. Medalist showed that sports anime still hits different when done with genuine heart. Psychological thrillers, slice-of-life dramas, historical fiction, cooking competitions — genres that got crowded out by isekai's sheer volume are finding space and audiences again.

3. Non-fantasy genres are rising fast

The isekai renaissance that isn't

Some reports suggest isekai is experiencing a "renaissance" through classic shojo manga adaptations — Red River, Magic Knight Rayearth, and From Far Away are getting anime adaptations for the first time. But this isn't a return to isekai dominance. These are vintage properties with existing fanbases, not the flood of generic light novel adaptations that saturated the market.

Solo Leveling represents the new model for power fantasy anime that isn't isekai. It delivers the same satisfaction — the weak protagonist who becomes overwhelmingly powerful — but without the transported-to-another-world framing. Sung Jinwoo doesn't go to another world; the other world comes to him.

What Kadokawa is doing about it

To address the issue, Kadokawa says it plans to rebuild its overall genre strategy and apply stricter standards before approving new projects. The company has also begun restructuring its publishing business more aggressively through a newly established Publication Steering Committee, formed in November 2025 to oversee "fundamental structural reforms."

Veteran anime director Goro Taniguchi (Code Geass, One Piece Film: Red) has long argued that Japanese animation needs more original works and not just anime based on existing manga, novels, or games. Kadokawa's admission suggests the industry is finally listening.

Frequently Asked Questions

Is isekai completely dead?

No. Popular isekai series like Re:Zero, Mushoku Tensei, and The Saga of Tanya the Evil continue to perform well. But the genre is no longer the dominant force it was from 2015-2025.

Why did Kadokawa's profit drop so much?

The 51.3% decrease was attributed to overreliance on isekai and Narou-kei stories, which led to a lack of diversity and an increase in titles that "lack originality or quality."

What is Narou-kei?

Narou-kei refers to anime and light novel adaptations originating from Shousetsuka ni Narou, a Japanese self-publishing website. Most isekai series fall into this category.

Will there be fewer isekai anime in the future?

Kadokawa's genre strategy rebuild suggests fewer formulaic isekai titles, but the company will continue greenlighting isekai — there are still 33 titles planned for 2026.