How Sony’s Live Action ‘Knights of the Zodiac’ Was a Decade-Long Transformation for Toei Animation

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Fans at Comic-Con will Saturday get a fresh taste of Sony’s “Knights of the Zodiac,” a fantasy action film based on the popular Japanese “Saint Seiya” manga and anime series.

Tomek Baginski directs a diverse cast headed by Famke Janssen and Sean Bean, as well as American-born Japanese sensation Mackenyu in the title role as Pegasus Seiya.

For Toei Animation, the Japanese studio behind the properties, the effort is the result of a decade-long strategic overhaul. And putting together the $60 million first leg in a major movie franchise took a circuitous route through Hungary and COVID disruptions. Toei Animation international producer Ikezawa Yoshi explains the journey.

Variety: What was the corporate or strategic point of view that led Toei Animation to make the live action “Knights of the Zodiac”?
Ikezawa: Today when you run an animation studio, especially the size of those in the Japanese industry, profit potential is limited. Other rights, including merchandising, licensing program or features outside of Japan are important, but there’s always been a ceiling.

Until quite recently, our audience were those people who enjoy anime. Those fans are unique and different from the audiences who enjoy American comics, or superheroes. Although the ceiling has been expanding gradually, we wanted to break free of these limitations and take a more businesslike approach.

How do you actually do that?
We’d been successful in selling manga outside of Japan, especially in the early years of the millennium and with the boost provided by the DVD business. But our chairman and president wanted to expand more into the mainstream. It is a big leap for a conservative Japanese animation company to try to get into Hollywood and reach a global standard. “Harlock Space Pirate,” a CGI feature film back in 2013 was our experiment.

I was lucky enough to secure funding internally and take my time when everyone was suffering from budget restrictions. And with “Knights of the Zodiac,” our new live action feature, we’re not just going into the live action field, we’re aiming at the international standard mainstream market.

It is not just my department that has been reformed. Toei Animation now has offices in Los Angeles and Paris, Shanghai and Hong Kong, and recently we started to court Middle East companies, trying to produce content from scratch with local creators and distributors. We are trying to become a “third wave production company,” where we team up with Chinese, Middle East or European companies and make global animations, where Toei Animation is the bridge to making that happen.

I struggled for the past ten years making change happen. It has been hard to convince, our management, executives and domestic partners. But in the next five to ten years, the animation genre will become bigger. I’d like to have in our teams ready.

How and why did you choose this particular anime property to become an international live action feature film?
Traditionally many anime titles are based on existing manga. And usually if you have a good manga, then the anime tends to be good. But that also means you have a lot of stakeholders: manga author, publishers, and what we Japanese call a production committee. This property was written by Masami Kurumada, who did not have an exclusive deal with one publisher. Instead, he controls the rights, and had set up a company.

Obviously, he wanted to have a certain creative input and protect his IP as it transitioned to CGI animation and live action features. But being able to have that direct conversation is much easier. Also, he’s a really great person. One time I screwed up causing a global backlash when I introduced the Netflix series adaptation. He took me out to a sumo wrestling match, dinner and a bar and [sorted things out]. Also, I grew up with this property and was a personal fan.

With the manga “Knights of the Zodiac” a big hit, globally, in North America, Latin America, Europe and China, we already have established fan base in many parts of the world. That’s why Sony Pictures approached us.

How long has the development of a “Knights of the Zodiac” movie been going on?
Mr. Kurumada had the idea almost since he started the manga in the 1990s. There was a live action pilot of three to five minutes. Myself. I’ve been working on this almost ten years now.

What were those steps?
Securing the rights was relatively easy because we had been working together. But I was not familiar with the Hollywood production studios, so I researched, met people and tried to became a partner to the creators. We partnered up with a director back then, but eventually it didn’t work out. We created visual materials and also started looking for possible partners in Europe. Many were interested, but the business structures didn’t work out. European producers depend so much on the [soft money] system. Conventional Japanese companies cannot produce a film that way.

Fortunately, Netflix came on board wanting to do the series as a TV animation. So, we kept on making the scripts, more than twenty drafts. And at the same time comic themes were becoming [cinema] mainstream, thanks to Marvel and DC.

We were never going to have their budgets in the hundreds of millions of dollars, Instead, with our more limited resources we could lean into the anime style.

After all of these negotiations and discussions, I figured, that it may be better for us to do it ourselves. We could show what we wanted to show and at the same time take the risk by ourselves.

Once you had decided to do it as an in-house production with Toei Animation controlling it, what happened next?

Tim Kwok at Convergence Entertainment had been working with us from very early days. We were introduced by Gale Ann Hurd (“The Terminator”) They introduced us to Tomek [Baginski]. He wasn’t a star director yet, though he’s really, really talented. But we also wanted to finish the script. Some of the drafts got Sony interested though they had not committed at that stage.

That was the beginning of the toughest period for a conservative Japanese company. We made a special purpose vehicle. We decided to shoot in Hungary, a foreign country, all using systems that we’d never used before. From production, through accounting department and legal departments, all had to face new challenges.

We thought we would have a Chinese partner, as well as Sony, but it didn’t work out the way we originally wanted it. And eventually, we put in all the equity for this project, allowing us to control the production, as well as the rights.

Even then, there were some executives asking why we were branching out. It was a legitimate question. But, I believe that an animation company cannot just do animation anymore. It has to grow up to become an overall entertainment company.

How did you choose Hungary as a filming location?
We’d been testing out a few other countries. The location shooting was ideal. And the rebate scheme was favorable. Then COVID starting to hit. Fortunately, Hungary’s rebate system and tax systems remained stable during that time.

Technically, the nationality of the film is Hungarian, but with 100% Japanese equity!

Originally, we were planning to shoot the previous year, 2020. But the pandemic meant we had to push back six months. Then another six months. We finally started shooting last year from July to late September.

What are the release plans?
There is currently a bottleneck in the VFX industry, but we are aiming for 2023. More detail will be announced at Comic-Con.

What are Sony’s plans for the movie? A worldwide theatrical release or a hybrid home entertainment debut, including some online-only territories?
We can’t give a specific answer, but they’re hinting at global theatrical, especially outside of the U.S. The question really is ‘what are they going to do in English speaking territories?’ So far, they are saying very positive things.

Toei Animation controls the rights in Japan and China. Sony is there for the rest of the world. In their territories, distribution and marketing will be their expense.

How this is envisaged as a film franchise?
The original manga runs to 28 volumes of comic books. The original anime series had 140 episodes, plus 30 or 40 sequels that belong to the original comic. So that’s nearly 200 episodes.

You can make many films with that. And, after the success of Marvel, studios are looking for properties that can make sequels, like “Harry Potter” or “Hunger Games.” We are looking at six movies as a package.

Did you use completion bonding?
Because Toei Animation put up 100% of the equity, we didn’t need to bond the whole production. But we still wanted some cover. And for cash flow purposes.

What will be the deciding factor in greenlighting the sequels?
We made this film as a basis to make sequels. And we’ve already started the conversation. So, while they’re doing marketing [for the first film] that’s when we probably start. But the decision is not only linked to this live action film. It relates also to the CGI animation and series. Essentially, we are running this live action for new audiences and the 2D animation for the old. For the new fans who enjoy the [live action film] they can come to watch the series as well. I’m already running three pipelines at once.

I was very fortunate to meet people like Tomek, our director. Not only is he talented, he’s something of a philosopher. The crews respect him enormously and I think you’ll find we introduce a lot of talented crews and cast through this movie, writers and the cinematographer.