Tokyo-based animation studio DLE saw operating losses deepen in its fiscal 2026 first half as it navigated corporate restructuring and invested in new technologies to compete in a rapidly consolidating market.
The company reported a ¥337 million ($2.2 million) operating loss for the six months through September, compared with a ¥322 million ($2.1 million) loss a year earlier, according to earnings released on November 14. Revenue fell 22.4% to ¥691 million ($4.5 million). The slide reflects the broader challenges facing Japanese animation studios as production capacity tightens and streaming platforms demand higher-quality content at tighter budgets.
DLE established an AI-powered animation unit in August as part of a broader strategy to reduce production timelines. The company has cited client inquiries for projects using the technology, with material beginning to air on terrestrial networks from October onward. Management expects the unit will yield clearer operational improvements in the second half, driven by new orders for upcoming broadcast seasons.
The studio consolidated underperforming operations and continues trimming loss-making divisions. For the full fiscal year ending March 2026, DLE projects returning to operating profitability with a ¥290 million loss, narrowing from a ¥489 million loss in the prior year.
