(Bloomberg): Noah Lyles, the fastest American sprinter and potential world champion, recently made headlines for showing off something Japanese. Before his race at the U.S. track and field trials for the Paris Olympics, Lyles showed off a Yu-Gi-Oh trading card to the camera, then did the same thing in his next race.

The video quickly went viral on social media after Lyles made a promise to a fellow American athlete aiming to compete in the Olympics, who is also an anime fan and has vowed to quote a line from “Naruto” during the qualifying rounds.

Don’t worry if you can’t tell the difference between Yu-Gi-Oh! and Yu Yu Hakusho. (Yu-Gi-Oh! began as a manga in 1996 and has since become a hugely successful anime and trading card game. Yu Yu Hakusho is one of the mangas that has been adapted into a live-action film by Netflix.)

The key takeaway from this phenomenon is to recognize how deeply Japanese soft power permeates contemporary culture and the opportunities it presents.

At least one alternative investment firm has taken the initiative. On the 18th, Blackstone announced that it would acquire Infocom, a listed subsidiary of Teijin and operator of Mecha Comic, a major digital comic service. It will make a tender offer for 6,060 yen per share, aiming to acquire all shares for approximately 275.8 billion yen.

Blackstone’s deal, which reportedly beat out rivals including KKR, is the most significant foreign investment yet in Japan’s growing soft-power empire and highlights the soaring valuation of the burgeoning sector.

The value of Japanese soft power content such as games, anime, and manga is only increasing. Eventually, interest may spread to Japanese movies and J-POP.

The influence of manga can be seen everywhere, from singer Usher, who performed at this year’s Super Bowl halftime show, cosplaying as Gojo Satoru, a character from “Jujutsu Kaisen,” at the request of fans, to McDonald’s, the world’s largest restaurant chain, running a campaign immersed in the world of anime and manga.

Yet just how big this market has become goes under the radar for many investors, analysts and pundits because manga rights are often split between many different companies, making them difficult to value.

Creative destruction

Japan’s content exports (mainly games, manga, anime, and movies) totaled 4.7 trillion yen, roughly the same as Japan’s semiconductor-related exports and the spending by foreign tourists who visited Japan this year (many of whom were inspired by Japan’s soft power).

This figure has more than tripled in just 10 years, and the government set an ambitious goal this month of quadrupling it further to 20 trillion yen by 2033.

Comic books, which have seen a sales boom during the coronavirus pandemic, now account for more than half of graphic novel sales in the United States over the past three years.

It’s the darling of a struggling publishing industry, taking up more and more space in U.S. bookstores and in Japan, where readers are shifting to smartphones and digital platforms, as the Blackstone acquisition shows.

Those unfamiliar with the manga genre might be tempted to think of it as simply the equivalent of American comics aimed at young male readers, with a focus on superheroes.

But comics have a much more diverse appeal, and Walt Disney seems to be embracing the approach of repurposing its properties to appeal to a wider audience (often leaving longtime fans behind).

But manga’s breadth means that anyone can enjoy it, with themes like romance, “other world” stories, coming-of-age stories and LGBTQ+ stories, helping it appeal to Gen Z fans.

In addition to traditional heroes vs. villains comic series that are popular with all age groups, recent hits include “Dungeon Meshi,” a cooking-themed series set in a medieval fantasy world, and “Oshi no Ko,” set in the cutthroat world of Japanese showbiz.

The volleyball-themed anime film “Haikyu!! The Movie: Battle at the Dump” has just topped China’s box office rankings.

In contrast to the business world, where American companies tend to be newer and Japanese companies much older, there is impressive disruption happening in the world of manga.

Best-selling franchises like “Spider-Man” and “Batman” have been rebooted endlessly for decades, but in the world of comics, even the longest-running series come to an end — so much so that four of the top five best-selling comics in the U.S. last year were published after 2016. New ones are always coming out.

But Japan has struggled to monetize this soft power success, with both anime and manga famously underpaid for their creators.

The industry is also battling piracy (Crunchyroll, the U.S. anime streaming giant now owned by Sony Group, started out as a site hosting unauthorized content), and AI-powered translation will make piracy even easier.

Government failure

From ski resorts to semiconductors, a defining feature of Japanese companies in recent decades has been their reluctance to invest in growth industries.

South Korea, on the other hand, has made greater strides in the digital comic format known as “webtoons.” Naver-backed Webtoon Entertainment is seeking a valuation of more than $2.6 billion in its upcoming Nasdaq listing. China, too, is keen to expand its soft power.

Despite the organic success of its homegrown content, the Japanese government’s “Cool Japan” strategy is largely seen as a failure.

For example, it is hard to believe that the world’s first “Dragon Ball” theme park will be built in Saudi Arabia, not in Tokyo or Osaka (or the United States or France). Saudi Arabia, which has bought shares in Japanese game companies, is looking for opportunities to use soft power and sports for political purposes.

In these circumstances, a company like Blackstone could be there to help, showing that opportunities abound in a sector whose wealth is little known.

Rare Yu-Gi-Oh cards can sell for tens of thousands of dollars, but the content assets themselves, and their creators, are worth much more.

(Reedy Garroud is a Bloomberg Opinion columnist covering Japan, South Korea and North Korea. He previously led the breaking news team in North Asia and was deputy bureau chief in Tokyo. Content in this column does not necessarily reflect the opinion of the editorial staff, Bloomberg L.P. or its owners.)

Original title: Blackstone Sees Billions in Manga. You Should Too: Gearoid Reidy (excerpt)

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