Japan’s Dwarf Studios is looking for a new partner for “Hidari,” the stop-motion samurai film voiced by Keanu Reeves, after talks with a U.S. company that offered to fund the entire budget in exchange for all rights stalled, producer Matsumoto Noriko told an audience at the Busan International Film Festival‘s Asian Contents & Film Market (ACFM) on Sunday.
Dwarf Studios co-founder and head producer Matsumoto was speaking at “Co-Producing with Japan: Opportunities and Challenges,” a Producer Hub session co-hosted by VIPO. Japan is the Producer Hub’s focus country this year. She was joined by Questry CEO Ibe Tomonobu and Knockonwood founder Yamaguchi Shin, with VIPO’s Tanimoto Hiroyuki moderating. Kawamura Masashi directs “Hidari,” produced by Dwarf, Whatever and Tecarat.
Dwarf’s “Hidari” pitch was a highlight of the Annecy Animation Showcase at Cannes and at Annecy itself earlier this year. A U.S. company’s offer to fund it came with a condition: it would take all the rights. Matsumoto said the company respected Dwarf’s creativity and was prepared to pay enough, but full funding would have left the studio with no control over a highly original project. Dwarf wanted to hold on to half the rights and asked Ibe to find the Japanese share. Before the talks could go further, the people Matsumoto had been negotiating with lost their jobs amid upheaval in Hollywood, and Dwarf is now looking for a new partner.
“Even with Keanu, we cannot stop the fire,” Matsumoto said.
Questry has set up a special purpose company for “Hidari” so that overseas and local investors can put money into the film side by side. Ibe said the project shows why development money matters. Dwarf made a pilot short in 2023 at its own risk, partly through crowdfunding, and the pilot traveled far enough to bring Reeves aboard. Questry now wants to back pilots and development-stage work, which in Japan studios and creators usually pay for themselves.
The film could not have been financed in Japan alone, Ibe said, and the reason lies in how Japanese film and anime are usually funded. Ibe spent 11 years at Goldman Sachs before founding Questry about four years ago. His presentation put the share of Japanese anime and films backed by production committees, or seisaku iinkai, at more than 90%, citing industry estimates. Publishers, labels, broadcasters, streamers, toy companies and ad agencies each put in a share, mainly to win a “window” – the right to exploit the title in their own business. Window fees are deducted first, so members often make more from their window than from their stake. Studios, meanwhile, are typically hired for a fee and see little upside.
In Korea, by contrast, investors, distributors and producers play separate roles, and Ibe said producers often take around 40% of profit after recoupment. “How you raise money decides how you share it,” he said.
Ibe’s presentation described the committee as a well-built system that works very well for titles made in Japan for Japan. It can still serve titles sold worldwide if overseas rights are planned from day one, he said, but the fit gets worse the more global a project is. A co-production with few Japanese windows to sell gives Japanese companies little reason to invest, and only Japanese companies can sit on a committee. Overseas sales made up 56% of anime industry revenue in 2024, up from 20% in 2014, he noted.
“If the world needs a project, we want to put money into it, even if the Japanese market can’t see it yet,” Ibe said.
Yamaguchi, who said he has wrestled with financing for more than 20 years, has made the committee work for an international film. Fukada Koji’s “Love on Trial,” which Knockonwood joined in 2017, drew 60% of its budget from a Toho-led committee, 29% from the government’s JLOX subsidy and 11% from presales through MK2 Films and French distributor Art House. Yamaguchi kept the committee to Toho, Knockonwood and one music company. The French money went in through Knockonwood’s share, backed by a separate contract giving the French partner full sight of the numbers – an arrangement he said still sits in a gray zone. The film world premiered at Cannes and had its Asian premiere in Busan last year.
Hikari’s “Rental Family,” starring Brendan Fraser, took a different route. U.S. partner Sight Unseen put in seed money in 2020 and later connected the project to Searchlight Pictures, which signed on in 2023. Searchlight covered 90% of the budget and a JLOX location incentive the other 10%. The film world premiered in Toronto in 2025 and was released in 73 countries. Yamaguchi has worked with Hikari for 15 years.
His third case, Eddie Cahyono’s “Ibuku,” plays in competition at Busan this year. Indonesia’s Talenta Media and Yasa Buana Films hold 80% and Knockonwood 15%. The last 5% came from Thailand’s White Light gap fund, released after the project won the White Light Asian Project Award at BICM. Christine Hakim stars in the 16mm film, which first won a prize at Busan’s Asian Project Market in 2015. Knockonwood came aboard nearly a decade later through Cinema at Sea.
“Independent filmmakers and producers never give up because we have to find the new ways,” Yamaguchi said. Japan has started opening up to co-production over the past two years, he added, though it remains behind other countries on language, legal and accounting fronts. Japan has co-production treaties only with China and Italy, and Yamaguchi said neither works well for the Japanese side.
Tanimoto said the government subsidy behind “Love on Trial” and “Rental Family” has been upgraded this year into a new program, IP360, with higher minimum budgets for production and post-production. Pre-production support remains, and applicants need a Japanese producer partner. The Agency for Cultural Affairs also offers a co-production subsidy covering 20%, subject to caps.
Stop-motion brings its own problems, Matsumoto said. A co-production typically requires 20% to 30% of the budget to be spent outside Japan, which is hard when the shoot cannot easily be split. Dwarf, which co-owns NHK mascot Domo-kun, has still found partners abroad. Its feature “Komaneko” drew more than 250,000 moviegoers in France, over 10 times its ticket sales at home, and “Mogu & Perol” is being developed as a series with French and Taiwanese partners. Dwarf is also adapting Matsumoto Taiyo’s autobiographical manga “Sunny.” Matsumoto, meanwhile, is developing “Moritō,” drawn from an art exhibition by Shibata Keiko, creator of the picture book “Pan Dorobou.”
“Even if I give up co-production, I don’t give up finding collaborators,” Matsumoto said.
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