The global theatrical market continued its uneven recovery in 2025, with Asia emerging as the main engine of growth and Japan standing out as one of the few major territories to surpass its pre-pandemic attendance levels. That was the central message from the launch of the 2026 edition of FOCUS – World Film Market Trends, presented by the European Audiovisual Observatory held on 15 May during the Marché du Film in Cannes (May 12-20).

The annual report, labeled by Marché du Film executive director Guillaume Esmiol as “the bible of the Marché du Film,” was introduced in a session that featured Martin Kanzler, deputy head of department for market information at the Observatory; Nicolas Edmery and Elisa Joliveau-Breney, film analysts at the Observatory;  and Naohiro Kaji, director of the Culture and Creative Industries Division at Japan’s Ministry of Economy, Trade and Industry. The panel discussion combined global market data, a closer look at Europe, and a special focus on Japan, this year’s country of honor.

A Global Stage
Kanzler said the 2026 edition marked a change in scope. Rather than concentrating mainly on Europe and the country of honor, the Observatory had for the first time added up its country-by-country data to provide broader global estimates by region. Film analyst Edmery clarified that “world” in this context refers to 82 markets, covering about six billion inhabitants and accounting for almost the entire global box office. The Observatory’s figures therefore remain provisional and based on differing national methodologies, but they offer one of the clearest snapshots of the theatrical sector’s direction of travel.

According to the study, 4.98 billion cinema tickets were sold worldwide in 2025, up 3% on 2024 but still roughly 28% below the 2017-2019 pre-pandemic average. Global gross box office rose by 5% to EUR 29.56 billion, remaining around 20% below pre-pandemic levels. The recovery was concentrated in a handful of large markets: the 10 biggest territories accounted for 77% of worldwide admissions and 76% of global box office.

Asia accounted for 54% of global admissions in 2025 and 38% of global box office, making it the largest region by attendance and revenue. The region’s growth was driven primarily by China and Japan, while Europe and Latin America recorded declines. China sold 1.238 billion tickets, up 23% year on year, while Japan reached 188.8 million admissions, a 31% rise on 2024 and its highest level since 2019.

By contrast, Europe fell by 5.4%, from 841 million admissions in 2024 to 795 million in 2025, while gross box office declined by 3% to EUR 6.51 billion (USD $7.59bn). North America was broadly stable in attendance terms, with the US and Canada reaching 780 million admissions, up 2%, though box office dipped slightly to EUR €7.85 billion (USD $9.15bn).

Hollywood’s Waning Influence
Edmery noted that the weakness of US films in Europe was one of the key factors behind the continent’s decline. US titles sold an estimated 48 million fewer tickets in Europe than in 2024, while European films also lost ground because of the absence of major French local hits. Admissions for national films in France dropped by 30 million, even as national films in other European markets collectively grew by around four million admissions.

Despite this, US films remained dominant in most markets. Globally, North American films accounted for an estimated 52% of admissions in 2025, down from 63% in 2019. Asian films, meanwhile, increased their share from 27% in 2019 to 36% in 2025, underlining a clear shift in the composition of global demand.

The symbolic case was China’s “Ne Zha 2”, which became the first non-US studio film to top the global chart, generating an estimated EUR €1.77 billion (USD $2.06bn) worldwide. Four Asian films ranked among the global top 20, including Japan’s “Demon Slayer: Infinity Castle – Part 1”, which grossed EUR €690 million (USD $804.25m) globally.

Japan was presented as a particularly striking case. Unlike Europe, where US films still represented around 62% of admissions, Japan’s market was overwhelmingly driven by domestic titles. Japanese films captured a 76% market share, while US films accounted for just 20%, well below their pre-pandemic average of 39%.

Asked why Japan had managed to exceed its pre-pandemic audience level, Kaji, representing Japan’s Ministry of Economy, Trade and Industry, pointed first to the competitiveness of local films. “The answer is simply attractive films,” he said, citing “Demon Slayer” and “Kokuho” as examples. He stressed that Japan had achieved this without quotas or major regulatory intervention. “It is a free market,” he said. “People can select over-the-top, Netflix or something like that, but they can also select the movie.”

The three biggest films in Japan in 2025 were all local: “Demon Slayer: Infinity Castle”with 27 million admissions, “Kokuho”with 13 million, and “Detective Conan: One-Eyed Flashback” with 10 million. While animation remained the most powerful driver of admissions, Edmery emphasized that live-action Japanese films also performed strongly, with titles such as the aforementioned“Kokuho”plus “Exit 8” showing the breadth of the local market.

Japanese Film Goes Global
The international growth of Japanese titles was another major theme. Kaji argued that around 2020 marked a turning point for the Japanese content industry, as overseas revenues began to outweigh domestic ones in certain segments. “Beforehand, overseas sales were some kind of pocket money, a bonus,” he said. “After 2020, the Japanese film industry started to think this is usual business.”

That change, he suggested, altered investment behavior. If international revenue is no longer seen as a bonus but as a normal part of the business model, larger production budgets become easier to justify. “That is why the quality is rising, and global people find Japanese film,” he said.

The production data also underlined Japan’s scale. The country produced 694 national feature films in 2025, the highest number on record and the second-largest production volume worldwide after India, which released 768 films. By comparison, Europe produced an estimated 2,522 films across all markets, while global theatrical feature production stood at approximately 7,707 films.

Elisa Joliveau-Breney, film analyst at the Observatory, contrasted Japan’s production ecosystem with Europe’s. Europe accounted for 35% of global production volume but only around 10% of global admissions. Asia accounted for 40% of global production and 36% of admissions.

The structural differences are significant. Animation represented only 3% of European production on average, compared with 13% in Japan. Co-productions accounted for 23% of European films, but only around 3% of Japanese releases. Adaptation also plays a much larger role in Japan: according to Joliveau-Breney, nearly all of the Japanese films in the country’s 2025 top 20 were adapted from existing intellectual property, with “First Kiss” being the only exception.

Kaji said adaptation sits at the center of Japan’s content strategy, which is increasingly organized around what the government calls “IP360.” The idea is to develop intellectual property across film, manga, anime, games and music rather than treating cinema as an isolated sector. “Japanese manga, anime and games are very, very charming,” he said. “The film industry can also use these advantages.”

How Financing Options Vary By Country
Financing models offered perhaps the sharpest contrast between Europe and Japan. Joliveau-Breney noted that European films remain highly dependent on public support. Most European films have budgets below EUR €10 million (USD $11.66m), with the average budget standing at about EUR €2.2 million (USD $2.56m). The main financing sources are direct public funding, production incentives, broadcaster investment, producer investment and pre-sales. When direct public backing and incentives are combined, public support covers almost half of the average European film budget; when public broadcasters are included, the public share rises further.

Kaji said this was “very surprising” from a Japanese perspective. “The norm in Japan is private investment,” he said. The Japanese production committee system, he explained, is a private risk-sharing structure in which multiple operating companies invest and take on specific roles. “The production committee is a risk-sharing system,” he said, adding that it works well for medium-sized investment but becomes more complex for large-scale films and international operations.

That system, however, is also evolving. Kaji said blockbuster projects increasingly involve fewer committee members, allowing a smaller number of companies to take larger risks. Whereas committees might once have involved ten or more companies, some now involve only three, while the anime studio MAPPA took on “Chainsaw Man” with a much more concentrated investment structure.

Government policy is also changing. Japan has traditionally favored low levels of regulation and limited direct intervention, in contrast with Europe’s dense system of funds, incentives, quotas, investment obligations and public broadcasters. Kaji said this reflects a long-standing belief that cultural diversity in Japan can be achieved through private-sector activity rather than state intervention.

But export is now giving the government a clearer rationale for action. “For the goal abroad, because of maybe the island country and the barrier of the language, it is difficult for Japanese people to go overseas and reach the global market,” Kaji said. He added that there is growing public and political support for helping Japanese manga, anime, film and games reach international audiences.

Japan’s content-industry support has therefore expanded. Kaji said government support for the content sector had doubled compared with the previous year, while the budget within his ministry had tripled. He linked this to the policy direction of Prime Minister Takaichi’s cabinet, which has identified the content industry as one of Japan’s growth sectors and a means of earning foreign currency.

Cultural Objectives, Global Ambitions
Next, Kanzler placed Japan’s approach in a broader policy context, first outlining the traditional logic behind European film policy. “Most European film policies are traditionally primarily driven by cultural objectives,” he said. “So producing films in national languages, telling local stories, connecting with local audiences. And at the same time, and of course this is closely linked, safeguarding the national film industries, which often are very small national markets.”

He then described three broad European models. “One type puts the producer and the industry at the center, and pursues both, on the one hand, cultural diversity goals and, on the other hand, an emphasis on the strength and the competitiveness of the local production industry,” he said. “That model, in different variations, is the most prominent one across continental Europe.” By contrast, “the UK pursues a very different approach,” with “a clear economic focus” on “GDP growth, job employment and industrial competitiveness as a whole.” At the other end of the spectrum, he added, the Nordic countries often follow what they call a “citizen focus,” where funding cares about “cultural identity and the role of film” and also contributes to “social inclusion and social cohesion.”

These rationales are matched by three main tools: investment obligations requiring broadcasters and streamers to invest in local audiovisual production; production incentives such as cash rebates and tax shelters; and direct public funding, both selective and automatic. “Direct public funding generally is seen as the tool of choice to support cultural diversity and artistic quality,” Kanzler said.

Yet European policy is also moving. Kanzler pointed to the growth of automatic funding and production incentives, suggesting a gradual shift from purely cultural rationales toward more economic goals. Investment obligations are also starting to have measurable effects. French CNC data, he noted, show streamer investment in French film production rising from virtually nothing before the pandemic to a meaningful share of financing in recent years.

What This Means For Exhibitors
For exhibitors, the implications of the FOCUS data are clear but not simple. The global screen base remains resilient, with more than 220,000 theatrical screens operating worldwide in 2025, compared with around 200,000 before the pandemic. The number of screens grew in Asia, the Middle East and Africa, remained stable in Europe and Latin America, and declined by 14% in North America.

But admissions have not recovered at the same pace. The market is more concentrated, more dependent on local breakouts in several key territories, and less automatically driven by US studio product than before the pandemic. Asia’s growth, Japan’s domestic strength and the rise of IP-led export strategies all point to a theatrical market whose center of gravity is becoming more plural.

As Kaji put it, Japan’s policy shift is no longer about supporting culture alone, but about treating content as “an industry of future national growth”. For the global cinema business, that may be the larger lesson of the latest FOCUS research: recovery is happening, but it is being led by markets and models that do not necessarily look like the old Hollywood-centered order.