Japan’s Dwarf Studios has taken its Keanu Reeves-voiced stop-motion samurai film “Hidari” back to the financing market after negotiations with a U.S. company stalled.

Producer Matsumoto Noriko said the company had offered to cover the movie’s full budget, but the proposed deal required Dwarf to surrender all rights. Although the potential partner respected the studio’s creative work and was prepared to provide sufficient funding, Dwarf did not want to lose control of the original project.

The studio instead sought to retain half of the rights and asked Questry CEO Ibe Tomonobu to secure the Japanese portion of the financing. Before negotiations could advance, however, the people Matsumoto had been dealing with lost their jobs amid upheaval in Hollywood.

“Even with Keanu, we cannot stop the fire,” Matsumoto told an audience Sunday at “Co-Producing with Japan: Opportunities and Challenges,” a Producer Hub session held during the Busan International Film Festival’s Asian Contents & Film Market.

Matsumoto, Dwarf’s co-founder and head producer, appeared alongside Ibe and Knockonwood founder Yamaguchi Shin. VIPO’s Tanimoto Hiroyuki moderated the discussion, with Japan serving as the Producer Hub’s focus country this year.

“Hidari” is directed by Kawamura Masashi and produced by Dwarf, Whatever and Tecarat. Its pitch was presented at the Annecy Animation Showcase at Cannes and at Annecy earlier this year.

A Pilot Opened International Doors

Dwarf created a pilot short for “Hidari” in 2023, taking on the risk itself and using crowdfunding for part of the financing. The pilot traveled widely enough to bring Reeves onto the project.

Questry has since established a special purpose company for the film, allowing domestic and overseas investors to participate alongside one another. Ibe pointed to “Hidari” as an example of why development funding is crucial, particularly in Japan, where creators and studios generally pay for pilot and development-stage work themselves.

Questry now wants to support projects at those early stages. Ibe also said “Hidari” could not have been financed solely within Japan, reflecting a broader mismatch between internationally oriented projects and the country’s dominant funding model.

Ibe, who spent 11 years at Goldman Sachs before founding Questry about four years ago, said industry estimates indicate that more than 90% of Japanese films and anime are funded through production committees, known as seisaku iinkai.

Under that structure, companies including publishers, labels, broadcasters, streaming services, toy businesses and advertising agencies each invest for the right to use a title within their own area. Those “window” fees are deducted first, and participants may earn more from that access than from their investment stakes. Studios, meanwhile, are commonly hired for a set fee and receive little additional upside.

Ibe described the committee structure as highly effective for Japanese titles aimed at Japan. It can also work internationally when overseas rights are built into the plan from the beginning, but it becomes less suitable as a production grows more global. Foreign companies cannot join a committee, while Japanese businesses have less incentive to invest in a co-production offering few domestic windows.

That tension has become more significant as overseas sales have expanded. According to Ibe’s presentation, international markets accounted for 56% of anime industry revenue in 2024, compared with 20% in 2014.

“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.

Other Films Show Different Financing Paths

Yamaguchi outlined several alternatives used by international productions. Fukada Koji’s “Love on Trial,” which Knockonwood joined in 2017, received 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. The film premiered globally at Cannes and had its Asian premiere in Busan last year.

Hikari’s “Rental Family,” starring Brendan Fraser, followed another route. U.S. partner Sight Unseen supplied seed money in 2020 and later connected the production with Searchlight Pictures, which joined in 2023. Searchlight provided 90% of the budget, while a JLOX location incentive supplied the remaining 10%. The film premiered in Toronto in 2025 and was released in 73 countries.

Eddie Cahyono’s “Ibuku,” competing at Busan this year, is held 80% by Indonesia’s Talenta Media and Yasa Buana Films and 15% by Knockonwood. Thailand’s White Light gap fund supplied the final 5% after the project won the White Light Asian Project Award at BICM. Christine Hakim stars in the 16mm film.

Japan has begun opening further to co-production over the past two years, Yamaguchi said, although obstacles remain in language, law and accounting. Tanimoto also said the subsidy used by “Love on Trial” and “Rental Family” has been upgraded this year into IP360, which has higher minimum budgets for production and post-production. Applicants need a Japanese producer partner, while pre-production support remains available. The Agency for Cultural Affairs separately offers a capped co-production subsidy covering 20%.

ShowBiz Take

The collapse of the U.S. talks leaves “Hidari” without the full-financing solution Dwarf had been offered, but it also keeps the studio from accepting a deal that would have cost it all rights to the film. The project’s predicament captures the central challenge discussed in Busan: financing globally minded Japanese work without stripping its creators and producers of control or potential returns.

Stop-motion adds another complication. Matsumoto said co-productions generally require 20% to 30% of a budget to be spent outside Japan, a difficult condition when production cannot easily be divided between locations.

What Happens Next?

Dwarf is now searching for another partner, while Questry’s special purpose company provides a vehicle for Japanese and overseas investors to finance “Hidari” together. Matsumoto made clear that the search will continue: “Even if I give up co-production, I don’t give up finding collaborators.”