Japan did a significant amount of outsourcing work for American studios as recently as the 1990's, but that definitely isn't the case now, and I think that's an

Japan did a significant amount of outsourcing work for American studios as recently as the 1990's, but that definitely isn't the case now, and I think that's an important distinction. While a number of things can be blamed, I would pin the main problem on how anime studios have historically tended to stay behind the curve in the use of labor-saving technology. (Compare against American animation, which has fairly enthusiastically taken on 3D, vector animation, digital matte, etc., as soon as they've been commercialized) It's a sustainable practice while you're in an up-and-comer economy and the local labor is cheap or impossible to match anywhere else, but it's much harder to swallow when China and Korea are putting out equally competent work at bargain rates. When the outsourcing market left Japan, you are left with the current situation where the local labor force is squeezed dry building low-revenue products for the leftover niches. There's some great stuff coming from it, artistically speaking, but the business won't last as-is. The future for Japanese animation will probably have to come from the American playbook - lower scale, more technology, and more diverse revenue streams.