Japan’s ambitious Cool Japan initiative is facing its final chapter after years of financial difficulties. A new government review has revealed that investments in video games, anime, manga, and music generated positive returns, while the fund’s live-action investments suffered substantial losses.
The findings were published by METI on November 9, 2026, as part of an assessment of the Cool Japan Fund, a public-private initiative established in 2013 to promote Japanese businesses and cultural products overseas. The fund is expected to be dissolved after accumulating losses of approximately ¥54 billion (around $340 million).
According to the review, the four entertainment sectors achieved a combined investment recovery rate of 120%, meaning the fund recovered more than it invested in those areas. Live-action investments, by comparison, recorded a recovery rate of only 46%.
Live-Action Investments Accounted for Most of the Losses
The review found that live-action projects received around 30% of the fund’s content-related investments but achieved significantly weaker results. Distribution-focused joint ventures, including businesses connected to broadcasting, were particularly problematic. These projects accounted for approximately 30% of the investment in the relevant sector but generated around 80% of its losses.
The report also identified a difference between supporting established businesses and investing in younger ventures. Mid- and late-stage companies achieved a 101% recovery rate, while early-stage businesses and joint ventures recorded only 42%.
Another major issue was how the money was allocated. Around 60% of content-related investment decisions went towards distribution, while only 10% supported content production itself. METI now wants future policies to place greater emphasis on promising intellectual property, growing markets, and direct support for creators.
Despite its association with anime and video games, only around 30% of the Cool Japan Fund’s total money went towards entertainment content. One of its largest investments, approximately $88 million, went to a startup developing artificial spider silk, which ultimately failed.
METI has outlined seven lessons from the fund’s performance as Japan prepares to revise its content industry policies. The government wants future investment decisions to rely more heavily on industry expertise, business performance, and growth potential.
The review could influence how Japan supports its entertainment industry in the coming years, particularly as it seeks to expand the global reach of its games, anime, and manga.
