What is Cosplay?
Many of our readers have likely never participated in or explored the cosplay market; we wanted to take the opportunity to call your attention to this fast and growing sub sector that has in many ways hitched its wagon to the video gaming and anime industries. Cosplayers is a term used to describe people who dress as fictional characters, often from a video game, anime, movie, or comic book. Cosplayers' primary outlet for enjoying this expensive pastime is to meet at organized video game, comic, or dedicated cosplay conventions.
There is a wide variety of genres that cosplayers are excited to represent. As you walk through the convention halls of this sub-industry you would notice a multitude of Spiderman, Batman, Dekus, Wonder Woman, and Deadpool characters conversing with each other (along with many other characters that you may or may not recognize).
To understand cosplay, it is important to understand its origins. The human desire to experience a different reality from day-to-day life is not a modern concept. Cosplay draws inspiration from its historical predecessor: masquerade balls, events where attendees wore a costume or a mask. These first started in France in 1393 and were popularized in Venice in the 15th century. While masquerade balls and costume parties remained popular in Europe through the 18th century, the fall of the Venetian empire in 1797 was the start of the demise of this tradition and form of festivities.
After the fall of the Venetians, large-scale costume festivities largely disappeared until ~150 years later when a man named Forrest Ackerman reignited the industry at the first World Science Convention in New York City in 1939. He has been credited by the International Costumers’ Guild as the “Father of Convention Costuming”. Fast forward to 1984, at the 42nd Worldcon, Nobuyuki Takahashi, the founder of Japanese Anime studio, Studio Hard, coined the term “cosplay”. 19 years later, the first dedicated cosplay conference was held in Tokyo in 2003 formally launching the cosplay industry.
The Cosplay Market
There are an estimated 10m cosplayers in the world today who are spending ~$4.8b in 2023 alone (that’s roughly $480/user/year). Relevant conferences drew 36m attendees in 2022; therefore, accounting for people attending multiple conferences, we believe the 10m estimate to be accurate. The cosplay market is estimated to be a $4.8b industry and it is projected to grow to a $8.7b industry by 2033 representing a 6.1% CAGR. Even though Japan has been the historical driver of the cosplay industry’s adoption, the United States is the largest market today and accounts for 27.9% of the cosplay market revenue while Japan only accounts for 4.7% (a relatively low share given the significant influence Japanese pop culture has had on the market). We believe the population disparity between the two markets is a driving factor.
The cosplay audience skews heavily female, with 64% of cosplayers being female. There is no advantage or disadvantage to age in cosplay (unlike in video gaming), which results in a wide age range of cosplayers, 60% of cosplayers are younger adults between the ages of 23-29.
The cosplay market is full of heavy spenders (similar to the “whales” that we are all familiar with in the mobile gaming industry). Today, ~2.5m people (25% of the cosplay community) pay to create 5+ costumes a year. Each of these costumes cost on average between $100-$400 to create; therefore, the top quartile of cosplayers are spending on average between $500-2000 a year. The time spent to create each costume varies dramatically, often hovering between 1-4 weeks according to the creators of Rubber City Cosplay. Therefore, not only are these users investing a significant amount of their entertainment budgets into this hobby, they are also investing a meaningful amount of time.
Why is Cosplay Growing?
In our view, there are two key drivers of why this market is continuing to accelerate.
1) The Rise of Digital Environment Time and Digital Identities: The growth of cosplay is occurring in tandem with more individuals spending an increasing amount of their lives in digital environments. In the US, adults are spending on average 8 ½ hours a day on digital devices and 64% of that time is engaging with media. In games, players are spending ample time “being” the characters in virtual worlds; which we believe is one of the reasons why many people are now wanting to take a step further and emulate them in the real-world. Cosplay is a powerful channel and outlet for gamers to publicly express this part of their own fandom and join other enthusiasts in their broader community. In a way, these fictional characters in virtual worlds are now being emulated in the real-world through the medium of people/players engaging in cosplay.
2) Real-World Escapism: Escapism has mainly negative connotations, as it is often used in reference to running from the hardships of reality. However, could there be a healthy channel for escapism from the regular cadences of everyday life? J.R.R. Tolkien, author of the Hobbit and the Lord of the Rings, said it best,
“I have claimed that Escape is one of the main functions of fairy-stories, and since I do not disapprove of them, it is plain that I do not accept the tone of scorn or pity with which ‘Escape’ is now so often used. Why should a man be scorned if, finding himself in prison, he tries to get out and go home? Or if he cannot do so, he thinks and talks about other topics than jailers and prison-walls?”
We often spend time in games, on social media, or consuming digital content to take a break from our day-to-day. We would argue that using cosplay to express appreciation for specific characteristics or values of a fictional character, such as Aragorn from Lord of the Rings, is one of the healthiest forms of escapism that exists in modern day entertainment.
Issues Facing the Cosplay Community
1) Modeling Hijacking The Community: One of the positives of cosplay is that it empowers anyone to put on the attire and persona of their favorite fictional characters. Ideally, as a form of fan art, cosplay is for everyone. However, there are pressures within the cosplay community that make it intimidating and difficult to approach for newcomers for a variety of reasons. Many cosplayers have taken issue with the rise of many famous cosplayers who are utilizing the industry as a beachhead to launch a modeling career outside of cosplay. Unlike in gaming (Twitch), the top 1% of influencers in cosplay are popular not only due to their skill, but often also their physical appearance. Their content and portfolios look closer to a modeling portfolio with professional photography and editing. Looking ahead, it is clear that Influencers will have a strong impact on what the “ideal” cosplay looks like and this could ultimately stifle the industry’s growth.
2) Copyright Infringement: In 2021, Japan announced that it would be further investigating those monetizing the creation of costumes and gear, specifically creators who are not adhering to the appropriate IP laws. As a grassroots industry, the vast majority of creators are independent and not adherent to IP laws, making them quite difficult to monitor and regulate. On the other hand, many IP owners (such as Blizzard) embrace independent creators promoting their IP as a free marketing channel for their IP. This is still a pending issue in cosplay and one that will likely need to get sorted as the industry expands.
3) High Cost of Entry: In gaming, you can start playing for free. The same can be said for most forms of entertainment; however, to get started in cosplay you are often facing at a minimum a $100 commitment to build or buy a costume. Cosplay, being centered around in-person events and conventions, also requires significantly more time input from participants. This onboarding friction and high cost of entry (both time and money) naturally reduces the likelihood of participation for many around the world. This will likely inhibit the growth of the cosplay market to emerging markets.
Takeaway: Cosplay is a growing industry with a user base that has a high propensity to spend. We believe that the current market estimations are low and that this will likely grow with a CAGR north of 10% given the strong tailwinds of 1) time spent in digital world identity and 2) real-world escapism. The industry will need to be careful of being hijacked by influencers with alternative agendas as well as the IP infringement issues it is currently facing in both Japan and the US, the two cornerstone countries for this burgeoning market. We believe the further integration of cosplay and gaming can create new forms of IP engagement, and unlock new value for gamers and cosplayers alike.