Welcome to Part III of our continuing history of Studio Gainax ! If you missed the first two installments, you can find Part One here and Part Two right here.

It would be a lie to say that the problems the GAINAX staff had with Toshio Okada were purely business. The staff were becoming increasingly frustrated with his loud personality and lack of action. He would talk about grand plans for the studio that he never followed through with and tease that he would leave the studio, only to go back on his word. General manager Yasuhiro Takeda later referred to him as a “hindrance” to their new anime productions. But removing Okada wasn't a simple fix to all of GAINAX 's problems and what followed was the worst year in the studio's history, saved by one remarkable show.





1992 - General Products’ Worst Year

It's difficult to determine if Toshio Okada was a good studio president or not, but history tells us that at the very least, he was an important studio figure and one of the main forces behind the studio's otaku image. Replacing him, therefore, was not a simple task and resulted in a strange dynamic where two people could claim that they, in fact, were the president of Studio GAINAX . To the fans, it was the credited director, Hiroyuki Yamaga that led the studio. But to the investors, it was Takeshi Sawamura who was the president, a job he'd already been supporting Okada with for the past two years.



Hiroyuki Yamaga reflects on GAINAX 's past in an interview for AniGamers .

This was the first step in turning GAINAX into what Okada later regarded as an “ordinary company”. In some ways, financial responsibility, sensible work hours and organised schedules is antithetical to the core of Studio GAINAX as a studio. But on reflection, the studio would not have survived the following years with Okada's chaos strategy. They'd just finished work on one of their most difficult projects, Nadia - The Secret of Blue Water , only to face the worst year of the studio's lifetime.

Up until now, General Products could be considered a joint company with GAINAX . Whilst they were supported financially by GAINAX and had the same head management, General Products had an entirely separate reputation, image and goals. One of their largest accomplishments was the establishment of the figure and merchandise convention Tokyo Wonder Festival in 1985, following a successful smaller event the year prior at the General Products store. The event initially took place on the third floor of the Tokyo Metropolitan Industrial Trade Center and over the years grew until the venue was the whole building itself.

However, whilst General Products were amazed by the turnout, it wasn't how they envisioned the company. Although WonFes (Wonder Festival) was popular, General Products’ garage kit sales were faltering. The event was loved by fans of figurines, garage kits and other merchandise, but it wasn't promoting General Products’ wares effectively. This informed their decision to pull out of WonFes and hand it over to competitor, Kaiyodo in 1992. Twenty-five years later in 2017, Kaiyodo 's WonFes boasted an attendance of 50,000+.



Wonder Festival in 2017 at Makuhari Messe. (Photo Credit:Tokyo Otaku Mode

This wasn't General Products’ only failed attempt to promote their own products. In 1989, they set up the now infamous General Products USA with Lea Hernandez and Toren Smith . The original plans were to bring both General Products and general anime merchandise over to the USA where anime fans still considered finding anime goods to be a treasure hunt. Hernandez later recalls that the staff at GAINAX /General Products were hard working but terrible businessmen. Part of their business strategy would be buying products from Animate and marking them up to sell in the US, a strategy that got them blacklisted from Animate before they'd even started.

With terrible communication between the US and Japan sides, very little merchandise actually being shipped and US staff not being paid, General Products USA was one of GAINAX 's most mishandled projects. However, their attempts towards capturing the American market did result in the creation of AnimeCon ‘91, the first American convention to be sponsored by a company within the Japanese anime industry. Whilst AnimeCon only lasted a year, it was subsequently turned into Anime Expo in 1992, the largest anime convention in the US today.



AnimeCon '91 is opened with an eleven minute AMV

With subsequent failures to sell products despite ambitious plans both in Japan and abroad, General Products was closed and incorporated back into GAINAX in 1992 after 10 years in business. Up until now, General Products was used as a way to fund GAINAX anime productions, but thanks to the GAINAX attitude of attempting to branch out as much as possible, General Products continued to over-extend into unknown territories that eventually defeated the company.

1992 - Studio GAINAX 's Worst Year

1992 was a long year for GAINAX . In addition to the end of General Products, the studio struggled to launch a new TV or film project. They were still being kept afloat by Takami Akai ’s successful games, particularly in regards to the launch of what would become a series of Princess Maker titles, but this was a studio built on creating anime.

At the time, the new president Hiroyuki Yamaga was determined to produce a sequel to Royal Space Force , named Uru in Blue . Yamaga had attempted to pitch the project before as the first film directed by Hideaki Anno , but Toshio Okada rejected the idea several times, stating that the idea wasn't interesting enough. Okada went so far as to vow never to let him make Uru in Blue, claiming that it was just a ripoff of the 1984 Walter Hill movie, Streets of Fire.

Now that Okada was out of the way, Yamaga took the initiative to restart the Uru in Blue project in 1992. Despite doubts from Yasuhiro Takeda about funding, the GAINAX team threw themselves headfirst into the project, designing characters and writing scripts. They didn't have a lucrative deal from Bandai Visual this time and so they just continued working on the project with the confidence that they would have the budget sorted out at some point. This meant that GAINAX was paying money to their staff to produce a film that they weren't confident in finishing at all.

With the closure of General Products came the sudden realisation that they couldn't possibly fund Uru in Blue themselves. The studio had relied on General Products to fund their new ideas ever since DAICON IV, but without the support, they had no option but to stop production on Uru in Blue entirely. Okada believed they became an ordinary company after he had left, but the reality is that the closure of General Products was the nail in the coffin for a GAINAX developed on crazy ideas.



Uru in Blue fighter jet designs (1992)

Nobody in GAINAX took the production of Uru in Blue well. Even before the project was halted, there was very little progress made and very little confidence that it would find its way to cinemas in the end. 1992 was a year when GAINAX couldn't produce their own anime. Many staff members left and even more considered following suit. One group went on to form Studio Gonzo directly as a response to GAINAX's lack of anime output.

When they finally realised Uru in Blue couldn't be produced, President Sawamura approached the entire staff, told them that Uru in Blue couldn't be made and said that they had no confidence in being able to pay salaries from this point on. This was Sawamura's way of downscaling the company without having to fire anyone. From that point, a large portion of the company just left. Everyone who remained either faced a heavy paycut or just took no pay at all.

It was very close to being the end of Studio GAINAX , but Sawamura insisted that he had a plan to bring it all back.

1995 - Neon Genesis Evangelion and The Worst Plan

Whilst the staff of Uru in Blue were in a slump after the production's cancellation, its director had started a brand new project supported by King Records . When Hideaki Anno came into GAINAX revealing that a friend from King Records had asked him to work on an anime together with his company, the staff immediately got to work on their first TV anime in 4 years.



Neon Genesis Evangelion (1995)

The production of Neon Genesis Evangelion itself was fraught with drama. Although this was GAINAX 's idea, the truth is that there were only three employees at GAINAX continuously working on the show, with most of the production taking place at the much larger Tatsunoko Production . According to Toshio Okada , Anno told him that Tatsunoko Production were to blame for the loss of cel animation before it had been filmed, meaning that time was lost on having to redo scenes. With Tatsunoko being the main production studio, they were responsible for scheduling issues that occurred midway through production.

Similarly, Hideaki Anno continued his typical habit of working on each episode at a time rather than thinking of an ending that would bring it all together. Okada describes his style to that of a manga author where they will just focus on getting each chapter out, rather than plan out a specific path to an ending. Obviously this works in manga where it's a one or two-man job, but this just meant that the scripts and storyboard would arrive too late for the animators. In later interviews Anno made a habit of blaming scheduling or the budget for issues with the ending of Neon Genesis Evangelion , but Okada insists that he just hates being asked about the last two episodes.

In spite of this, the series was an unprecedented success. So unprecedented that they didn't bother having Asuka speak proper German because they never thought anyone from Germany would watch the show. The series topped the charts for DVD sales and became a cultural phenomenon. GAINAX had become resigned to thinking that anime was just something that they wanted to create and it was their other ventures that were there to make money. Akai had left the company in 1994 and taken the Princess Maker series with him. Evangelion needed to be a success and the idea of creating an anime that actually made money seemed like a miracle to them.



Pen Pen from Neon Genesis Evangelion wins Best of Show at Anime Expo 1999

Not only was Evangelion selling well, but more people had become attracted to GAINAX 's current games on sale thanks to the series. In the years following, they started to produce best selling Evangelion tie-in games such as Neon Genesis Evangelion : Girlfriend of Steel in 1997 and the same year, produced an alternative ending to the TV series in the film The End of Evangelion .

It was a miracle for GAINAX as a studio and especially to President Sawamura personally. For him, Evangelion was the studio's big chance to get everything back on track. They'd come so close to closing after the failure of Uru in Blue and the end of General Products that he had resorted to desperate measures to keep the studio alive, even going so far as to commit fraud.

Some theorize that this was Sawamura's attempt to put away some money so that the studio wouldn't have to face another near-bankruptcy. Others believe that he just wasn't used to handling so much money and made a mistake. Regardless, in 1998, Studio GAINAX President Takeshi Sawamura was arrested for tax fraud after eight years at the company.