Shigeru Miyamoto, Toru Iwatani and Satoshi Tajiri may not be household names, but they have clearly left their mark on the world.

They are the creators of Super Mario, Pac-Man and Pokemon respectively, and they can be said to be the "robber barons" of Japan's creative industry, tapping the nation's unique cultural DNA to create characters that have stolen hearts all over the world.

Several events last year ensured that Japan's characters stayed at the top of people's minds. There were the launches of smartphone games Pokemon Go and Mario Run, while Japanese Prime Minister Shinzo Abe appeared in Super Mario's iconic red cap at the Rio Olympics closing ceremony.

Of course, there was also the mega box office hit Kimi No Na Wa (Your Name).

Japan's creative scene, often referred to as ACG (animation, comics and games), has the backing of a multibillion-dollar "Cool Japan" fund as part of a strategic push, both at home and abroad.

Popular characters such as Astro Boy and Sailor Moon are also emblazoned on official merchandise for the 2020 Tokyo Olympic Games.

But even so, observers in the ACG industry have told The Straits Times about their fears of a bleak future, given an insular mindset and increasing competition.

COOL JAPAN

Japan's Ministry of Economy, Trade and Industry (Meti) is in charge of the country's Cool Japan blueprint, through which Japan wants to raise the presence and appeal of its cultural products abroad - including those of its small and medium-sized companies.

A ministry report issued last April showed that the market size of Japan's content industry, which includes ACG as well as TV drama and music, in 2013 was around 12 trillion yen (S$150 billion).

The Japanese market for content industries may be second only to the United States - worth over 2.5 times more - but Meti noted that growth was slowing and the industry ought to increase its presence in foreign markets.

It proposed a strategy based on promoting the appeal of Japanese culture overseas in order to boost sales of Japanese content products.

Companies appear to already be doing so - to a certain extent .

The Association of Japanese Animations (AJA) valued the anime industry at 1.83 trillion yen in 2015, up 12 per cent from 2014.

The engine behind this rise was the 583.3 billion yen clocked abroad, the highest figure ever and a 78.7 per cent surge from 2014.

The evident appeal of Japan's ACG industry also means there is no lack of entrants, both Japanese and foreigners. One of them is Penang native Chuah Zean, 22, who grew up indulging in anime and manga series such as Naruto, Gundam and One Piece.

Now a final-year undergraduate at Tokyo's Digital Hollywood University, he said with a chuckle that in the past, he would sometimes spend entire days devouring anime and manga.

Mr Chuah, who specialises in computer game design, said: "I love Japan's kawaii (cute) characters, and the very novel stories with interesting and diverse plot lines."

His schoolmate Yuto Kuriyama, 19, hopes to be a movie director. His "all-time favourite" is the City Hunter spy series that has spun a Hong Kong movie, a Korean drama and a Japanese video game.

It was also the love for video gaming that led Mr Michael Susetyo, 28, to the industry. The programmer for Japan's SquareEnix was part of the 200-strong team behind last year's Final Fantasy XV game.

The alumnus of DigiPen Institute of Technology in Washington told The Straits Times: "In the past, I was very much into Japanese hairstyles and rock bands, so the designs of the main characters also line up very well with what I consider as 'cool' video game characters, as well as being instantly recognisable as Final Fantasy characters."

CHOPPY WATERS AHEAD?

But working in the industry has got Mr Susetyo worried that Japan will not be able to keep up with Western studios.

He did not cite specific games, but titles that topped bestseller lists last year include Call Of Duty: Infinite Warfare, published by US firm Activision, and Grand Theft Auto V, a British export but now published by New York's Rockstar.

And then there are studios such as the US' Electronic Arts, which is behind sports titles such as Fifa and franchises such as The Sims.

Mr Susetyo said that English standards have to be improved to allow Japan to "continue to reach new heights at the same pace as the West".

He added: "Technology evolves from the spread of information, and with so much information on the Internet being available in English only, it takes much longer for information to reach Japanese developers."

This point was also raised by Mr Hisatsugu Kasajima, founder of the Japan arm of Czech production house Eallin. The 40-year-old, who started the outfit in 2010, attributes the lack of interest in English to an insular, inward-looking mindset perpetrated by the bursting of an economic bubble in the late 1980s that has led to stagnation.

This is the reason why creators tend to cater to a domestic market which thrives on sub-cultures that might not take flight elsewhere, AJA vice-secretary-general Naoki Ishikawa said.

Many domestically popular series contain explicitly sexual and violent scenes, or fantasies that might not be easily understood or accepted elsewhere in the world, he said, adding that the global success of movies such as Kimi No Na Wa is "rare".

Moreover, Japanese animation studio Studio Colorido's founder Hideo Uda, 38, noted that the anime industry is hindered "from becoming a major player like Disney or Pixar" because it uses traditional pen-and-paper methods, which he said are increasingly unproductive in a fast-moving industry.

"As craftsmen, they have very good techniques. That is an advantage," Mr Uda said.

"But it is also a disadvantage. Innovation hardly takes place and not many people can be involved in the process. So it will remain a domestic industry without any cross-border collaboration."

Given that ACG is a costly business, Mr Ishikawa observed how companies are trying to "mitigate risks by sharing the burden across several stakeholders" - which means that the future of the anime industry will "lie in the hands of the financiers, not the creators".

But the industry has had a record of not having a pulse on the market. A recent example was historical anime Kono Sekai No Katasumi Ni (In This Corner Of The World), which was a sleeper hit in Japan. It failed to get financial backing and was produced only after it raised funds through crowdfunding.

The emergence of new publishing platforms has also threatened manga circulation numbers, and editor Yoshinori Iwai of the Comic Beam arm of publisher Kadokawa fears the market is "shrinking day by day", even as market saturation is a growing issue. This trend has resulted in artists becoming more realistic about their chances of succeeding, he observed.

One example is Ms Yuka Okuyama, 40, an up-and-coming name in his stable of 200 artists. Awarded the New Face Award at the Japan Media Arts Festival in 2015 for her debut manga Tamashii Ippai (Lots Of Life), she works full time as a librarian in a children's library and freelances as a picture book illustrator.

Mr Iwai said: "In the past, almost all artists were desperate to publish their work because the market is very hard (to break into) and very big. But now it's got to a point where people are less desperate. Many comic artists have had to think about their future."

And this is a double-edged sword, as it could affect the industry's output, he said. Ms Okuyama creates a new manga story only "about once or twice a year".

Creators say the Cool Japan strategy is sorely in need of an additional thrust: to groom and support upcoming talent and companies to lay the groundwork for the future.

"It is pointless if Cool Japan ends up being focused on funding 'quantifiable projects', such as overseas cosplay or anime events where attendance numbers can be easily monitored," Mr Uda said.

Mr Kasajima added: "While it is not a bad idea to promote Japanese creative concepts to the world, it will benefit Japan in the long run if more money can be properly channelled into developing new resources or subsidising young directors."