Japan's booming animation industry is in crisis -- with low pay, long hours and a huge shortage of artists -- just as its global popularity has never been higher.

Three of the 10 feature films in the running for top prize at the world's most important animation festival in Annecy in France -- which ended Saturday -- are from Japan.

The country is the only real challenger to Hollywood's dominance of the labor-intensive genre.

But just as Japanese anime seemed to be threatening to loosen Pixar and Disney's grip on the popular imagination with the likes of the teen mega hit "your name." and a Nintendo Super Mario movie in the pipeline, long-running structural problems are in danger of sapping its rise.

With talk of a talent shortage, its greatest star, the legendary Studio Ghibli founder Hayao Miyazaki, has come out of retirement at 78 to make "How Do You Live?" -- which may be released next year -- with speculation that he could take on another feature if his health holds.

Miyazaki blazed an arthouse trail with such animated classics as the Oscar-winning "Spirited Away", "Howl's Moving Castle" and the fabulous "My Neighbor Totoro".

But Yoshiaki Nishimura, a former Miyazaki stalwart who produced the Oscar-nominated "The Tale of The Princess Kaguya", told AFP that the industry was struggling to "face up to a lack of animators, bad working conditions and perhaps a lack of creativity".

His peers also complain of low pay, a paucity of emerging young talent and burn-out in overworked animation teams who often put in 12- to 18-hour days.

Rising star Keiichi Hara, who showed his new film "The Wonderland" at Annecy after winning the jury prize there four years ago with "Miss Hokusai", feared for the future.

"Perhaps the biggest problem in the Japanese animation industry is that there are no more young animators," he warned.

Ayumu Watanabe -- whose beautiful "The Children of the Sea" was shown out of competition at the festival -- worried about visual "standardization" and lack of originality, not helped by the fact that "fewer and fewer animators can draw well by hand."

Even industry heavyweights like Mamoru Hosoda, the genius behind "Wolf Children", "The Boy and the Beast" and "The Girl who Leapt Through Time", have to put in punishingly long hours with relatively tiny teams.

He told AFP last year that his latest hit "Mirai" was inspired by his wife complaining that she was a widow to his work, calling him to account for leaving her "to bring up my son on her own".

Watanabe said that the industry has split into two extremes: "Big productions who can call on an incredible number of animators and at the other end of the scale, and more artistic projects that have a lot less money."

All eyes later this year will be on the release of "Weathering with You", Makoto Shinkai's fantasy follow-up to the record-breaking "your name.", now the highest-grossing Japanese film of all time.

Its production team unveiled a sneak preview of the supernatural story at Annecy, with a high-school runaway meeting a girl who can change the weather.

With a live-action version of "your name." in the works and U.S. television about to remake the cult Japanese series "Train Man" about an anime-obsessed youth, the genre has never been closer to the international mainstream.

Nishimura said that he has tried to keep the "Ghibli style and spirit going... with a mix of hand-drawn and computer animation" at Studio Ponoc, which he set up after Miyazaki -- a heavy smoker who was having health problems -- first hung up his pencil in 2013.

It scored its first hit in 2017 with "Mary and the Witch's Flower" and Nishimura premiered a series of new shorts at Annecy.

For him, the industry's woes are "the result of an accumulation of problems over the last five to 10 years", but he insisted his studio was trying to "create a new environment".

And as the wowed audiences at Annecy for Masaaki Yuasa's touching "Ride Your Wave" proved, despite its problems Japanese anime can still get things very right.

The story of love, surfing and grief struck a huge cord with critics at the French festival.

Amel Lacombe, whose company Eurozoom is a key French animation distributor, said the industry's travails are due to its rapid growth, and now "we are in a period of adjustment".

She believes that the Japanese authorities are waking up to anime's importance and global reach "as a export force". </s> An alleged arson attack on a respected Japanese animation studio left a shocked nation in mourning, as investigators looked to identify victims and determine a possible motive in one of the deadliest acts of violence in Japan’s modern history.

At least 33 people — many of them young — were killed a day earlier when a man appeared to douse flammable liquid through the Kyoto Animation Co. studio and set it alight, triggering an inferno, officials said. Some 36 others were injured, about 10 critically.

The blaze at the production house struck at a pillar of Japan’s anime industry, an obsession in the country. Kyoto Animation, known as KyoAni, had produced hits such as “Lucky Star,” “K-On!” and “Haruhi Suzumiya,” winning worldwide acclaim for its skilled drawings.

Outside the charred shell of the company’s workspace in Kyoto’s outskirts on Friday, crowds of well-wishers left flowers and messages of support for the victims. Many bowed, or knelt down and prayed as they offered their respects.

Police investigators, meanwhile, scoured the three-story building. Their probe covers suspected arson, murder and attempted murder, the Kyodo news agency reported.

A 41-year-old male suspect remained in police custody in the hospital after suffering burns all over his body, said Hiroyuki Sakai, deputy police chief in Fushimi, Kyoto. He said police would investigate the man’s circumstances once he had recovered sufficiently.

A woman who saw police detain the man a day earlier told reporters that he “seemed to be discontented, he seemed to get angry, shouting something about how he had been plagiarized,” according to Reuters.

The suspect had no connection with Kyoto Animation and was thought to have been living near Tokyo, public broadcaster NHK said.

[Suspected arson attack on Japanese animation studio leaves more than 30 dead]

Hideaki Hatta, a co-founder and president of Kyoto Animation, said Thursday that the studio had been receiving threats, including emails threatening murder. He said the attack had “broken our hearts.”

Witnesses said they heard a man yell, “Die!” at startled employees just before the building erupted in flames.

The tragedy was the worst mass killing in Japan since 2001, when 44 people died in a suspected arson attack on a gambling parlor in Tokyo.

“We are at a loss to imagine what drove him to commit such an act of extreme violence, if he was the arsonist,” the Asahi Shimbun newspaper said in a commentary on Friday.

Violent crime is unusual in Japan. On social media, many people offered condolences and expressed shock at the loss of life. Some posted creative tributes under the hashtag #PrayForKyoani.

Messages of sympathy and supported flowed from around the world following the disaster.

A GoFundMe page set up by Sentai Filmworks, a Texas-based animation company, had raised $1.3 million for victims and their families by Friday afternoon in Japan.

Pixomondo, another visual-effects company, offered its support. The attack on Kyoto Animation was “an assault on art itself,” CEO Jonny Slow said in a statement.

Today’s coverage from Post correspondents around the world

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Japanese anime developers report that the industry is in crisis, even as its popularity soars in its native country. Among the reasons are low pay, long hours, and a huge shortage of artists – just as its global popularity reaches record levels.