In 1946, a company founded in Nagoya, Aichi Prefecture, began its life not as a creator of moving images, but as a manufacturer of textiles. This entity, originally named Kyokuichi, would eventually evolve into TMS Entertainment, one of Japan's most influential animation studios. The transformation was neither immediate nor linear. By 1961, the company had established Shine Mink Co., Ltd. in Sapporo, Hokkaido, and opened a mink breeding farm to enter the fur business. It was not until 1974 that the company merged with Shine Mink to form the Mink Division, and even then, the pivot to entertainment was not complete. In 1989, Kyokuichi Shine Industries was acquired by the Watchman Group, a mass retail group specializing in watches and home appliances, which prompted a fundamental shift in business format from manufacturing to entertainment. This transition laid the groundwork for what would become a global animation powerhouse, though the path from textile production to anime production was paved with financial struggles and strategic reinventions.
The Puppeteers Turn Animators
The true birth of TMS Entertainment's animation legacy occurred in 1964 when Yutaka Fujioka, a former staff member of a puppet theater company, established Tokyo Movie with investment from Tokyo Broadcasting System. Inspired by the broadcast of Astro Boy, the first domestically produced animated TV series, Fujioka was encouraged to create a studio that could produce animation. However, the studio's first production, an animated adaptation of Osamu Tezuka's Big X, was a disaster. All the staff came from puppet theater backgrounds and were unfamiliar with animation, leading to a huge financial loss and a crisis that nearly doomed the company. To restore management, the studio received capital participation from Kokusai Hōei, and Fujioka was demoted to director and head of the production department. Rokuzo Abe of Kokusai Hōei was appointed as the new president. In 1965, Fujioka established A Production to rebuild the production system, and Tokyo Movie formed a business alliance with A Production. Fujioka approached Daikichirō Kusube, who had left Toei Animation, and invited talented creators such as Tsutomu Shibayama, Yoshio Kabashima, and Keisuke Morishita. He also welcomed Isao Takahata, Hayao Miyazaki, Yasuo Otsuka, and Yohichi Kotabe, who had been forced out of Toei for overspending on The Great Adventure of Horus, Prince of the Sun. Early directors like Tadao Nagahama and Masaaki Osumi, all from puppet theater companies with no animation experience, produced a series of hits including Obake no Q-Tarō, Star of the Giants, and Attack No. 1. Thanks to them, Tokyo Movie became independent from Kokusai Hōei in 1971, and Fujioka returned as president. The studio continued to produce a string of hits thereafter, including Tensai Bakabon, Lupin the 3rd Part I, Aim for the Ace!, and Gamba no Bouken.
In the early 1980s, Yutaka Fujioka dreamed of expanding to the United States and making full animation films that could compete with Disney. He chose the legendary American comic strip Little Nemo as the basis for his animated film, and began acquiring the film rights in 1977. Telecom Animation Film, established in 1975 to train animators who could draw full animations, received over 1,000 applications for its employee recruitment, and Fujioka hired 43 people with no animation production experience. Rather than hiring animators with limited animation production experience, Fujioka chose to hire inexperienced amateurs and train them to become first-class animators who could draw full animations. Telecom invited Sadao Tsukioka, who was considered a genius, as a lecturer for the first year, and Yasuo Otsuka the following year. In June 1976, Tokyo Movie spun off its sales division to establish Telecom Animation Film, and the original Tokyo Movie was absorbed into it. In the summer of 1978, Fujioka acquired the film rights to Little Nemo. However, due to difficulties in raising funds and securing staff, production was slow to begin, so Telecom produced TV series and movies under Otsuka, including Lupin the 3rd Part II. Otsuka approached Hayao Miyazaki and Isao Takahata, with Miyazaki directing the second Lupin the 3rd film, The Castle of Cagliostro, and Takahata directing Jarinko Chie. Fujioka frequently invited Hollywood film professionals to screen the two films to promote the production capabilities of Telecom and the Japanese animation industry, which at the time was underrated in the United States. These films attracted attention, especially among young animators, including John Lasseter. The event also drew an unexpected response, with Telecom receiving requests to produce a TV series from countries outside the U.S., including Italy. In the U.S., the studio took on subcontracting work for production companies such as Disney, Warner Bros., and Filmation, and became proficient in the art of full animation. In the spring of 1981, Fujioka received an investment from Lake, a consumer finance company, and established Kineto TMS, a U.S. incorporated company, to begin full-scale production of the film Little Nemo: Adventures in Slumberland. The initial production budget was reported to be about 3.6 billion yen (16 million dollars at the exchange rate in 1981). Under Fujioka's grand order to produce a world-class animation film, creators from Japan and abroad were assembled. Many prominent figures were involved in the production, including Hayao Miyazaki, Isao Takahata, Osamu Dezaki, Yasuo Otsuka, Ray Bradbury, Jean Giraud (Mœbius), and Chris Columbus. However, the production ran into difficulties due to various crosscurrents between Japan and the U.S. Miyazaki and Takahata, who were originally slated to direct the film, dropped out of the project, and the staff was replaced one by one in the following years. In 1982, Fujioka secured the cooperation of Frank Thomas and Ollie Johnston from Disney's Nine Old Men. In the summer of that year, at their invitation, Miyazaki, Takahata, Otsuka, and other Japanese staff members visited the U.S. under the guise of training. While the Japanese staff members were greatly inspired by the two during their training, when the two saw the sketches drawn by Miyazaki, they said there was nothing they could teach them. Young American animators who had heard rumors of the Nemo production also came to Kineto TMS to sell themselves, including John Lasseter and Brad Bird, who reportedly met Miyazaki there for the first time. Bird brought in his own film and unofficially drew several image boards. Fujioka succeeded in meeting George Lucas and asked him to be the American producer, but he declined, saying he was busy with the new Star Wars and Indiana Jones films, and instead recommended Gary Kurtz, who was also a producer on Star Wars. Fujioka from Japan was appointed line producer, and Kurtz from the United States was appointed film producer. Kurtz recommended Ray Bradbury as the screenwriter, and the project got underway. When the Japanese production team was handed the first draft of Bradbury's screenplay, they wondered if it was too philosophical to be entertaining. Miyazaki presented various ideas for the script to Kurtz, but he never adopted them. Kurtz was executive-producing Return to Oz for Disney at this time and spent most of his time in London and New York, visiting the site of Nemo in Los Angeles only once a month, and then for just a couple of hours in the afternoon. Due to conflicts with Kurtz, Miyazaki resigned from Telecom in November 1982, and Takahata in March 1983. Kurtz's dictatorship continued, and the project went astray. The directors changed one after another, and the team went all to bits. The production budget of 4.5 billion yen (19 million dollars at the 1984 rate) ran out before the animation work began, and the project was suspended in August 1984. In June 1988, TMS dissolved its own production division, Tokyo Movie, and absorbed it; Tokyo Movie would continue as a TMS subsidiary until 1993. Fujioka resumed production after securing an additional investment of 1 billion yen (6.9 million dollars at the 1987 rate) from Lake in 1987 and terminated his contract with Kurtz and took full responsibility for the film, becoming executive producer himself. The film was completed in 1988 and released in Japan in July 1989, and received mixed reviews, it ended up grossing around 900 million yen (7 million dollars at the 1988 rate) at the box office. It was released in the United States in 1992 in 2,300 theaters and sold 4 million videos, but the production costs were not recouped. The film took about seven years to complete (it took 10 years for the U.S. release), and production costs eventually rose to 5.5 billion yen (43.3 million dollars at the 1992 rate). The main staff changed constantly, and later left behind a vast number of ideas, designs, and sketches submitted by various creators, scenarios by Bradley, Columbus, most of which were never used, and others, and pilots in three versions: Sadao Tsukioka's version, Yoshifumi Kondō and Kazuhide Tomonaga's version, and Osamu Desaki's version. It was an unprecedented project in the history of Japanese animation, but it ended in failure, and Fujioka took responsibility for it, relinquished all rights related to Tokyo Movie, and retired from the industry. Although Fujioka's ambitions ended in failure, Nemo left a great legacy, laying the foundation for the subsequent expansion of Japanese animation into the American market and also pioneering exchanges between Japan and the US in animation, such as the relationship between Miyazaki and the Nine Old Men. The composition of members at Telecom Animation Film for animated feature films directed by Hayao Miyazaki and Isao Takahata also served as a stepping stone for the transfer of Toei Animation's feature film production techniques to Studio Ghibli.
The Global Subcontractor
Throughout the 1980s and the 1990s, TMS and its subsidiaries, Telecom Animation Film and South Korea-based Seoul Movie, animated for various companies, including DiC, Disney Television Animation, Warner Bros. Animation, Marvel Films Animation, Studio Ghibli, Madhouse, Production I.G, Sunrise, Bones, ShoPro, Shogakukan Music & Digital Entertainment among others. TMS began production of the Japanese-Italian co-production TV series Sherlock Hound in 1981 at the request of RAI, the Italian national public broadcasting company. The series was directed by Hayao Miyazaki and animated by Telecom Animation Film. However, the collaboration was dissolved after six episodes were produced, and the remaining 20 episodes were subsequently financed by Japanese companies. Kyosuke Mikuriya took over as director, and with Telecom leaving to focus on the film Nemo, TMS outsourced the animation to the fledgling studio Gallop. Osamu Dezaki directed the largest number of animated co-productions, including Mighty Orbots, Bionic Six, and Sweet Sea. In the U.S., the studio took on subcontracting work for production companies such as Disney, Warner Bros., and Filmation, and became proficient in the art of full animation. Since the early 2000s, TMS itself has no longer supplied animation services to Western studios due to increasingly demanding costs, although there have been a few exceptions such as Green Lantern: First Flight (2009) and Superman vs. The Elite (2012). While it still produces feature films, these films are primarily spinoffs from existing anime properties, which include the likes of Anpanman and Detective Conan. TMS has studios 1 through 7 under its production headquarters, each with a nickname for the work they are involved in, such as Studio 1, 3xCube, Trois Studios, Rogue Studio, and Double Eagle. Each studio has its own production and management staff, including producers and production assistants. As for animators, each studio contracts them on a work-by-work basis. However, head creators sometimes have exclusive contracts and are given their own desks within the company to work on. In addition to its own studios, TMS has wholly owned animation studios such as Telecom Animation Film, TMS Jinni's (former Jinni's Animation Studio) and Toon Additional Pictures.
The Sega Merger
Kyokuichi Co., Ltd. opened its first amusement arcade in 1991, and joined the Sega Group in 1992 through a business alliance with Sega and Sega Toys. In the same year, Tokyo Movie Shinsha became a subsidiary of Sega through a stock acquisition. On the 1st of November 1995, Sega absorbed Tokyo Movie Shinsha into Kyokuichi, with Kyokuichi as the surviving company. In conjunction with this merger, Kyokuichi made Telecom Animation Film and TMS Photo, which were subsidiaries of Tokyo Movie Shinsha, its own subsidiaries. Kyokuichi established a Tokyo branch office and launched its animation production division, Tokyo Movie Division. The name of the company was credited as Kyokuichi Tokyo Movie in the anime works produced at that time, however international prints used the TMS-Kyokuichi name. In 1996 the Los Angeles studio was established. On the 1st of January 2000, Kyokuichi changed its name to TMS Entertainment Co., Ltd. The name Tokyo Movie remained as the name of the animation production division and as the brand name for animation production. In 2003, the company completely withdrew from the textile business. Since then, animation production and amusement arcade operations were the two mainstays of its business. In 2003, American brokerage group Merrill Lynch became the second-largest shareholder in TMS Entertainment after acquiring a 7.54 percent stake in the studio. Merrill Lynch purchased the stake purely for investment purposes and had no intention of acquiring control of the firm's management. In 2005, Sega Sammy Holdings acquired a 50.2% stake in TMS Entertainment, making it a subsidiary. In 2006, the Tokyo branch was reorganized as the Tokyo headquarters and merged with the Head Office in Nagoya, Aichi Prefecture. The headquarters then moved to Shinjuku, Tokyo. The Los Angeles studio was reorganized as TMS ENTERTAINMENT, USA, INC. In February 2007, TMS Entertainment announced the completion of its fourth Tokyo studio (Building D) in Nakano, Tokyo. The company stated that Shinjuku would thereafter serve as the base for its corporate division and Nakano as the base for its production division. In 2008, the company withdrew from the amusement arcade business and concentrated its business on animation production. In 2010, TMS Entertainment was delisted and became a wholly owned subsidiary of Sega Sammy Holdings through a share exchange. In 2011, the credits for Detective Conan were changed to TMS Entertainment, and animation production under the Tokyo Movie name ended. In November 2012, TMS relocated its headquarters to Nakano, Tokyo. TMS Entertainment took a stake in Jinni's Animation Studio, a VFX and CG production company, in 2013 and made it a group company in 2015. With that, the company name was changed to TMS Jinni's. In November 2013, a new studio was completed in Nakano, Tokyo. In April 2015, the Sega Sammy Holdings was reorganized to form the new Sega Group. TMS Entertainment became a wholly owned subsidiary of the newly established Sega Holdings. Marza Animation Planet moved from being part of Sega Holdings to being part of TMS Entertainment in April 2017. TMS Entertainment transferred all of the digital content planning, development, and production business owned by its subsidiary TOCSIS to Marza Animation Planet in April 2019. In July 2021, TMS Entertainment announced the launch of the Unlimited Produce Project. The project is characterized by its focus on collaboration with outside studios to strengthen production operations such as planning, production, business, and promotion of works. The first project is Resident Evil: Infinite Darkness, which was distributed worldwide on Netflix from the 8th of July 2021, and was produced in collaboration with CG studio Quebico. In April 2023, Marza Animation Planet moved from under TMS Entertainment to under its parent company, Sega. In 2024, TMS Entertainment transferred the 3DCG video production business of its subsidiary TMS Jinni's to its subsidiary Toms Photo through a company split.