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TOKYO (Reuters) - The artistic legacy of Hayao Miyazaki, the reclusive and bearded Academy Award-winning director and animator sometimes called Japan's Walt Disney, has never been more certain.
Yet at the same time, the commercial future for Studio Ghibli, the privately held Tokyo studio he left behind in retirement, has never been more in doubt.
Under Miyazaki, Ghibli became famous for intricate, hand-drawn animation and imaginative coming-of-age story lines that made films like 1988's "My Neighbor Totoro" into an international hit. A dozen years later, he masterminded what remains today as Japan's highest grossing film, the Academy Award-winning "Spirited Away".
In recognition, Hollywood is about to add its ultimate honor by giving Miyazaki, 73, a lifetime achievement Academy Award.
But the animation studio is finding that life after Miyazaki, who retired last year, is tough going.
Ghibli's first release since the legendary animator's departure, "When Marnie Was There", has failed to catch fire with Japanese moviegoers over the summer.
Besides the gaping hole left by Miyazaki, Ghibli, like Japanese companies in other industries, faces a range of challenges: high payroll costs, low productivity and the rise of new and cheaper hubs for production elsewhere in Asia.
In six weeks, "Marnie," the story of an asthmatic high school girl sent off for what becomes a summer marked by an unexpected and mysterious friendship, has taken in just $28 million at Japanese theaters. The mediocre takings comes as Ghibli’s fans and critics debate how and whether the studio will survive without the commercial magic of its founder.
Senior producer Toshio Suzuki made waves last month when he said in a series of interviews that Studio Ghibli might have to dismantle the expensive production system set up under Miyazaki, which included employing full-time animators in Japan.
"We’re going to spring clean and restructure," Suzuki, 66, said in an interview with TBS broadcasting.
Suzuki said the studio would take a break and could re-launch with a different and lower-cost business model that could shift production from Japan to Southeast Asia or Taiwan.
"Ideas will be formed in Japan and the animation could be made in another country,” he said. “It will be ‘Made in Asia’.”
Ghibli declined to make Suzuki or Miyazaki available for comment. A studio spokeswoman, who declined to be named, said the privately held company, had no further comment on its plans.
Famous for starting production without a complete script, Miyazaki insisted on working in pencil and spurned computer animation, resulting in intricately drawn frames and very long production spans. Some feature animations consist of about 10,000 drawings, but Ghibli’s sometimes exceed 80,000.
In fact, Ghibli, under Miyazaki, made a virtue of its high-cost approach, doing everything - and working deliberately - from an ivy-covered, three-storey building in Tokyo's western suburbs.
Ryusuke Hikawa, an expert on Japanese animation, estimates Ghibli was averaging just five minutes of animation production a month, given its recent pace of producing a feature every two years.
That was sustainable when the studio, with Miyazaki at the helm, was turning out consistent hits. The nine Ghibli films that he directed averaged a box office take of $115 million.
"Spirited Away," which came out in 2001 and won the Academy Away for best animated feature, remains Japan’s highest grossing film, taking nearly $300 million at the box office - ahead of both “Titanic” and Disney’s “Frozen”.
Box office takings are particularly important for Ghibli because the company has limited spin-off merchandising, another break from the approach of Hollywood studios which long ago abandoned hand-drawn animation for computers. In June, Suzuki, 66, told a podcast for fans he had cautioned staff to keep merchandising sales below $100 million to sharpen the focus on movie-making.
In part, as a result, Ghibli has had a volatile earnings record, according to credit rating agency Tokyo Shoko Research, which audited the studio’s books. In the fiscal year that ended March 2012, it earned $9 million. That dropped to $5 million in 2013 and then jumped to $30 million in the just-ended fiscal year, reflecting the success of Miyazaki’s last film, “The Wind Rises”.
Fans are focusing on "Marnie" because it is the first Ghibli film shaped entirely without the involvement of Miyazaki, Suzuki or the other famed Ghibli director, Isao Takahata.
Yuichi Maeda, a movie critic, said the film's director, 41-year-old Hiromasa Yonebayashi, had delivered brilliantly drawn animation, but without the energy of a Miyazaki film. The studio said overseas distribution plans have yet to be decided.
Maeda said he did not believe Ghibli could prosper without Miyazaki's guiding hand. “Ghibli’s popularity, unlike Pixar or Disney, depends on who directs its movies,” he said. “I don’t think Ghibli without Miyazaki can succeed."
Editing by Kevin Krolicki, Elaine Lies and Jeremy Laurence