How Did Gainax Fall Apart?

On June 7, 2024, an era in the anime industry came to a close with the announcement that Gainax had filed for bankruptcy. To more modern anime fans, that may not mean all that much, but to otaku from the 90s and 2000s, Gainax was one of the best studios in the business.

Between seminal works like Nadia: The Secret of Blue Water, FLCL, Gurren Lagaan, and of course, Neon Genesis Evangelion, Gainax was an institution. They pumped out some all time classics and were defined by their absolute love of the weirdness that was anime. And yet, their closure wasn’t a surprise in the slightest to me. In an era where more and more anime titles were being pumped out each season, Gainax became a relic of a bygone era.

While it may be somewhat easy to just point at one thing and say that was the sole reason why Gainax collapsed, the truth is a lot more complicated. I do think most of their problems stem from one singular event, but even then, there wasn’t a singular moment it all went downhill for the company. Then again, as someone who has followed anime for most of my life, it’s not too hard to see how Gainax slowly died. Here’s the story of a company that started off as a passion project between a group of devout animators, only to eventually lose that drive and become a walking corpse.

Make no mistake, when Gainax began, it was full of nothing but drive. The original founders of Gainax, before forming the company, all cut their teeth making shorts that violated all kinds of copyright laws but they made them because they just wanted to create anime. Their most famous short from this time was probably the short they made for DAICON IV, which illegally sampled Electric Light Orchestra and featured an anime girl fighting Darth Vader and more or less forced their way into the market. But that’s just the kind of company they were. They didn’t care about measly copyright laws because they had a passion to just make solid anime.

Because of the quality of their animation for these shorts, they were able to establish Gainax in 1985 as their own company. For the better part of a decade though, they were in flux. Sometimes they would create profitable works, like Nadia: The Secret of Blue Water and Gunbuster, but other times they would produce commercial failures like Wings of Honneamise, despite how nearly all of their titles were critically acclaimed.

By the mid 90s, Gainax was on the verge of shutting down. The studio needed money to stay afloat and needed a big hit. Then Neon Genesis Evangelion happened and you better believe that Gainax made bank off of it. Hideaki Anno, the studio’s founder, apparently didn’t want to make the series at Gainax give how strained the company’s coffers were (something that could easily be seen in the last few episodes of the series). But with Eva’s success, Gainax was ready for a whole new era of production to begin from the ludicrous amount of money they now had.

But with that came a double edged sword. Sure, the company was able to put out a lot of great anime and hire new talent like Hiroyuki Imaishi, a lot of shady corporate dealings were taking place. Thanks to the massive influx of money from Evangelion, the head of the company, Takeshi Sawamura, was arrested for tax fraud due to the money earned from Evangelion. Basically, because Gainax was financially unstable in the early 90s and there was no telling how long Evangelion would be profitable, Sawamura saw this as an opportunity to secretly stash some of that money away for a rainy day so to speak in case the company needed it. That’s the charitable reading of the situation, mind you, since the uncharitable one is because Gainax finally had a hit, Sawamure wanted to cash out before the company went belly up when the Eva horse was beaten to death.

Throughout the 2000s, while Gainax was producing critical hits, none of them ever reached the same heights as Evangelion. Titles like Gurren Lagaan and Mahoromatic were successful, but they weren’t Evangelion. In a somewhat lucky stroke of fortune around this time, Anno wanted to remake Evangelion, only this time as a film series. Given how the original series faced production issues, some from budgetary constraints and others from Anno facing several bouts of depression, Anno wanted to create a new version of the series, not dissimilar from what remakes like Full Metal Alchemist Brotherhood or Hunter X Hunter did. But, in a move that began to spell the end of Gainax, Anno opted to do the remakes at a new company that he would create, a studio called Khara.

Anno opened up a few years ago about why he did this. First of all, he thought that if he did the series at Gainax then all of the artists would just be yes-men to him and not challenge him whatsoever. More importantly, due to the heads of the studio’s previously shady behavior, as well as the fact that most of the animators working at Gainax were hardly getting a salary, he wanted to ensure that the staff working on the film would receive fair compensation for their work.

And with that, Anno was gone. Gainax would still profit from some of the merchandise produced in relation to Evangelion, but Khara would get the royalties. Combine that with a string of failures like *checks notes* The Mystical Archives of Dantalian and talent like Imaishi leaving to create companies like Studio Trigger, Gainax was in a pinch. They were back to being unprofitable and producing fewer titles than ever before. By the early 2010s, anime streaming became more prevalent around the global and Gainax simply didn’t have the manpower, talent, or money to keep up.

And so came the begging. Gainax begged Khara/Anno for money in order to keep the company afloat, which Khara did, only for Gainax to then sell off the rights to many of the series like FLCL to other companies, as well as selling original concept art, storyboards, and production materials of their earlier series for profit. This resulted in Khara suing Gainax for not paying back the initial loan, which Anno was originally going to ignore until he learned about the the production materials being sold off. Plus, the negative publicity that Gainax was receiving from everything happening at the time was damaging the Eva brand, which only reaffirmed Anno’s actions to make it clear that Khara was now the home of Evangelion, not Gainax. Khara won that lawsuit, plunging Gainax even further into debt.

By this point, Gainax was hardly producing anime. The last series they ever made was in 2015 and it was an anime collaboration with Suburu of all companies. Shock of all shocks, it was a financial failure and Gainax struggled to find funding ever since. They made a second company called Fukushima Gainax and sold it off to another company for quick profit, but without a steady stream of money coming in from anime productions and merchandise, the money dried up. The death blow came in 2019 when a member of the board of directors had “indecent acts” against an aspiring voice actress, permanently blackening the name of the company in any investor’s eyes. And from there, it was only a matter of time until they declared bankruptcy.

Obviously, there’s a lot of things that I didn’t really get into here, but understanding Gainax’s collapse isn’t simple. This was a company that struggled to survive even in its early days, hit it big, then slowly began to make a lot of shortsighted and greedy decisions that ruined the goodwill that it had earned in the anime community. Of course, not making an anime in nearly a decade definitely didn’t help matters, but that was only systemic of the larger instability the company eventually developed. However, if you were to ask me what the really caused the death of Gainax, it all comes back to Evangelion.

It’s hard to not look at everything that happened to Gainax and not trace everything back to Eva. I don’t begrudge or hate Evangelion – it was the hit that Gainax needed to survive – but it’s success led to the numerous poor decisions to try to replicate its success. It’s what made Anno leave Gainax. It’s what led to Gainax selling off production materials and cutting off the financial support they needed from Khara. It’s what led to the tax fraud. All of their problems, in one way or another, all come back to Anno’s magnum opus.

Gainax certainly has a place in anime history, but its relevancy was almost nonexistent even a decade ago. The passion that made Gainax the hub of animation that it was still lives on in studios like Khara and Trigger as they become more and more preoccupied with financial gain. When the quality titles dried up, that was it. Their last notable hit was Panty & Stocking With Garterbelt in 2010, but even then it was a polarizing title that not everyone loved. Gainax has a place in anime history, but that time passed decades ago. It’s not shocking at all to me that Gainax died. It’s been a walking corpse for a while.