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Wednesday, April 24, 2024

How a Major Toy Company Kept 4chan Online

Toxic image board 4chan has managed to stay online for the past seven years—amid boycotts and advertiser flight, after being implicated in several mass shootings, even as it was identified as a source of the conspiracy theories that inspired the January 6 insurrection—thanks, in part, to a $2.4 million investment from a major Japanese toy company.

A partnership agreement, obtained exclusively by WIRED, shows not only how current site owner Hiroyuki Nishimura acquired the far-right message board but also how Japanese industry helped finance the deal.

The text of the deal shows that Nishimura invested $800,000 of his own money, plus $4.8 million from his company—using cash from a major Japanese telecommunications company. But the most surprising part of the deal came from Good Smile Company, which acquired a 30 percent share in 4chan for its $2.4 million investment.

This contract was filed by 4chan to investigators with the New York Attorney General’s office, as part of that agency’s now-closed investigation into the May 2022 mass shooting in Buffalo, New York. WIRED obtained the documents through a Freedom of Information Act request.

These documents for the first time confirm the opaque corporate partnership that began with 4chan's 2015 acquisition, just as scrutiny increases on the money behind the long-running website.

That scrutiny may be weakening the resolve to keep 4chan going. According to Nishimura, Good Smile is in the process of ending its partnership with 4chan—this comes as the company’s lucrative deal with The Walt Disney Company is set to be terminated. (Good Smile, meanwhile, says it ended its relationship with 4chan last June.)

The investigation was opened by request from Governor Kathy Hochul, who asked her attorney general to probe whether 4chan could face civil or criminal liability for "promoting, facilitating, or providing a platform to plan and promote violence." While the New York Attorney General’s office has declined to pursue criminal charges against the website and its owners, a spokesperson told WIRED that at least one other law enforcement agency is still investigating the website. 

The New York attorney general is also calling for new legal tools to stop 4chan from promoting domestic terror attacks. Understanding the website’s corporate structure will be necessary to hold them to any US law.

Good Smile, Bad Times

For years, Good Smile has been effective at hiding its role at 4chan. While the company may not be a household name in the United States, its Nendoroid collectable figurines are a big deal for anime enthusiasts. According to the company’s website, it had nearly 4 billion yen ($27 million) in sales in 2021, mostly driven by those small figurines.

Good Smile produces licensed content for a variety of major brands, from major manga series like Attack on Titan to video games like Assassin’s Creed and movies like The Matrix. But Good Smile’s largest licensor is, without a doubt, Disney. The company markets dozens of toys and figurines from Disney properties, like Spider-Man, Buzz Lightyear, and Mickey Mouse.

In recent years, Good Smile has branched out into content creation, working with various animation and film studios, has opened online wholesale companies in China and elsewhere, and has even sponsored a Super GT racing team.

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In 2021, former employees of Good Smile’s Los Angeles office—embroiled in a legal dispute about the future of their employment—countersued the company. In legal filings, they allege Good Smile was responsible for the distribution of potentially obscene sexually explicit anime products and merchandise ("lolicon") and that it, unbeknownst to its family-friendly corporate partners, was funding 4chan.

The accusations were picked up in The Ankler and The Hollywood Reporter, which cited a Good Smile representative admitting a passive investment in 4chan. The lawsuit was settled out of court, and the allegations were never proven.

Last year, WIRED obtained documents detailing a nondisclosure agreement involving Nishimura, Good Smile, and Tokyo-based telecommunications firm Dwango. The three parties, the document said, were in talks to acquire 4chan. In December, The New York Times confirmed that Nishimura purchased 4chan with funding from three unnamed Japanese partners.

When asked about Good Smile’s involvement in 4chan last December in an interview with publisher Shueisha, Nishimura confirmed the relationship. He and Good Smile’s president, Takanori Aki, had met at an anime convention and become friends, Nishimura said. “However, Good Smile Company is in the process of leaving.”

Good Smile did not respond to WIRED’s request for comment.

As details of Good Smile’s contribution to 4chan have emerged, some of its partners have become anxious. A Disney spokesperson declined to comment about Good Smile on the record. However, a source at the Disney Company, who asked not to be named because they are not authorized to speak about internal business decisions, confirmed that they have a licensing arrangement with Good Smile that expires in May. Disney, the source said, had been unaware of Good Smile’s relationship with 4chan. After being alerted to those ties by WIRED, they said, Disney has opted not to renew its deal with Good Smile. 

From Future Search Brazil to 4chan’s Future

As Good Smile’s involvement in 4chan has become clearer, more questions have swirled about Nishimura’s other partner.

Nishimura founded the image board 2channel in 1999 and quickly cemented himself as a cult figure in Japanese culture. Even before he inspired Chris Poole, 4chan’s founder, to start the English-language knockoff, Nishimura had given millions of Japanese—particularly young men—the freedom to speak anonymously, candidly, and bluntly. That, in turn, generated an ironic, anime-obsessed subculture that traded in a particular brand of hard-right, anti-feminist, anti-Korean, and “identitarian” politics.

That disruptive talent made Nishimura an attractive figure in Japan’s otherwise conservative media culture. In the early 2000s, Nishimura forged a partnership with another young entrepreneur who had risen to become chair of telecommunications firm Dwango: Nobuo Kawakami.

Kawakami and Dwango had set up a Japanese rival to YouTube and were trying to figure out how to grow it beyond just a platform to upload videos ripped from their American competitor. So they brought on Nishimura to apply 2channel’s charm to their new platform, Niconico.

Nishimura’s own company, Future Search Brazil, joined forces with Dwango—journalist Yoshiaki Sei reported that Nishimura took a 20 percent stake in Niconico. And in a matter of years, Niconico became the biggest video streaming platform in Japan.

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Niconico had one particular feature that, at least at the time, made it unique: Viewers could comment, in real time, via a text overlay on the stream.

“With Niconico, you could participate and comment and keep up with the TV show by having conversations with your fellow viewers,” says Liz Rodwell, an assistant professor of digital media at the University of Houston and author of the upcoming book Push the Button: Interactive Television and Collaborative Journalism in Japan. When Rodwell grew interested in the platform, around 2011, it had become a significant force in Japanese media.

Nishimura was the ideal figurehead for such an operation, she says. “He was, by himself, a good figure to have associated with anything internet-related, because he represented a kind of fantasy of freedom, success, nerd heroism.” Through Niconico, Nishimura gave users this powerful anonymity right at a time when trust in the state was falling.

“This was like right after the Fukushima disaster, and there was a lot of activism happening around Niconico,” Rodwell says. “Because people felt like the mainstream media was not being transparent or honest. There wasn't enough public safety information being disseminated. People were unclear whether food from that part of Japan was safe and whether it was in their grocery stores.”

Niconico had, like 2channel, transferred power to the masses in a rather unprecedented way. But with that came 2channel’s notoriously toxic culture.

Around 2011, Rodwell began interning for the Free Press Association, a journalism organization that leased office space from Dwango and used Niconico to stream press conferences. “It was responsible really for the Free Press Association going down,” Rodwell says.

The anonymous commenters on Niconico and 2channel “really mobilized and ganged up on” the FPA’s founder, she says. “They were constantly sort of bombarding the livestreams for the press conferences … I struggled to find screen captures for my book that didn't involve anything racist or sexist.”

The promise and peril of Niconico seemed to be exactly what Nishimura wanted. A perverse synergy had cropped up between Niconico and 2channel: One would drive traffic and engagement toward the other, then back again. 

This emergence of identitarian troll culture dovetailed with a rise of the Japanese right. The right-wing Liberal Democratic Party made particular use of Niconico to reach Nishimura’s angry and disenchanted userbase.

At the height of Niconico’s success, Dwango and Nishimura began contemplating a North American conquest. Dwango was keen to expand internationally and saw Nishimura’s libertarian experiment in broadcasting as a way to do that. Dwango dispatched Nishimura to explore how to make Niconico an American success story. It was, according to Nishimura, during this period that he first met Aki, Good Smile’s CEO.

Those plans fell apart when Nishimura and Future Search Brazil were raided by Tokyo police in 2012. Investigators alleged that Nishimura had aided and abetted the drug trade by failing to police drug transactions on 2channel. Prosecutors did not pursue the case, but it cast a pall around Nishimura in a way that 2channel’s content had not.

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Kawakami “was afraid that Nishimura could be arrested by the police,” says Sei, author of the upcoming book The World of 2 Channel. Sei recently interviewed Kawakami. “So he dismissed Nishimura as a director.” The two, however, remained friends, he says.

In November 2014, according to Sei’s reporting, Dwango bought out Nishimura’s stake in Niconico for an undisclosed amount. In January 2015, Poole announced his retirement from 4chan. By July, Nishimura was in talks to buy the website. In those conversations was Good Smile and, despite its corporate divorce with Future Search Brazil, Dwango. The three parties signed a nondisclosure agreement to cover those discussions.

Kawakami, Sei says, “wanted the opportunity, through the 4chan business, to make inroads into the US and world markets. He had a special interest in this business.” Those discussions, according to Kawakami, went on to a “very late stage.” 

Ultimately, Dwango’s involvement fell through because Kawakami “was afraid of taking the legal risk,” Sei says. Nevertheless, Dwango’s money almost certainly found its way into 4chan. “It's very obvious that Future Such Brazil received a very large amount of money [from Dwango], and then those funds were used to buy 4chan,” Sei says.

Nishimura did not respond to WIRED’s request for comment, and we were unable to reach Kawakami.

After the divorce from Dwango, Future Search Brazil tried to expand its media presence, including a short-lived attempt to launch a Japanese version of the entertainment news publication Variety in September 2015, the same month the 4chan deal was announced.

Eiichiro Fukami, president of Future Search Brazil subsidiary Tokyo Sangyo Shimbun, signed the 4chan partnership agreement. He confirmed to WIRED that he “was an executive officer of a related company” in the 4chan deal but declined to answer further questions, citing professional ethics.

Holding 4chan Accountable

While 4chan’s growing infamy was apparent in 2015, its penchant for extremism has become increasingly clear in the years that followed.

It birthed QAnon, grew the incel movement, and was cited by multiple mass shooters around the world as a direct source of inspiration. Its users generated a dizzying amount of disinformation around the 2020 presidential election, deployed swattings to go after their detractors, and produced an enormous amount of far-right, racist, anti-Semitic, misogynistic, and queerphobic memes. 4chan users consider the site an American political kingmaker, and it has helped corrode the political culture of Canada, Australia, and Europe.

While it has been suggested that Nishimura is working to boost the right-wing Liberal Democratic Party in Japan, it’s more difficult to ascribe any kind of American political ambition to 4chan's owner. Apart from his posts on 4chan, which tend to be administrative, he rarely even comments in English. According to documents filed to the New York investigators, Nishimura actually lives in Paris.

The fact that 4chan became both more hateful and more prominent after 2015 is a feature, not a bug, says Mitsuwo, a former 2channel user and moderator of the rival 5channel: It was all business. “I personally think that Nishimura and his moderators intentionally encouraged hate speech on 2channel in order to heighten the influence of the site,” Mitsuwo says.

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Nishimura has escaped this kind of scrutiny for years, even as other major platforms have been put under the microscope. Jim Watkins—who, through his hosting company, effectively stole 2channel from Nishimura before becoming administrator of 8chan—has been hauled before Congress to testify about his site’s role in inspiring mass shootings. There have been rounds of hearings and investigations into the role that Facebook, Google, and Twitter play in political extremism, misinformation, and censorship. The US Congress’ January 6 committee had also requested similar documents from 4chan.

New York attorney general Letitia James launched her investigation after a mass shooting targeted a grocery store in a predominantly Black neighborhood of Buffalo. The alleged shooter, according to investigators, uploaded a white supremacist, neo-Nazi manifesto to 4chan and posted a link to a Twitch livestream of the deadly assault. After the attack, the video was reposted multiple times to the platform.

“I was not born racist nor grew up to be racist,” the alleged shooter’s manifesto reads. “I simply became racist after I learned the truth.” He credits 4chan as the source of that truth.

Late last year, Nishimura was asked about 4chan’s role in inspiring the attack. The site owner brushed aside the connection, suggesting that 4chan’s promotion of violent white supremacist ideology was no different than former president Donald Trump’s rhetoric.

James has called for new laws to hold platforms like 4chan accountable for hosting videos of mass shootings and murder. In a report published in October, James recommended “imposing civil liability for the distribution and transmission of this content, including making liable online platforms that fail to take reasonable steps to prevent unlawful violent criminal content from appearing on the platform.”

New York isn’t alone. The European Union’s Digital Services Act aims to fine sites that host anti-Semitism, in addition to other types of hate. Given 4chan’s rampant hate speech, it’s a move that could hit them particularly hard. But any action against 4chan requires, or is at least enormously helped by, knowing who actually owns and runs the site. Now that 4chan’s ownership and funding is in the public record, the temperature may start to increase on Nishimura.

“I think Mr. Kawakami’s description of Mr. Nishimura is fair and quite accurate,” Sei says. “Kawakami described Nishimura as a child who tears the legs off from a bug. And that he enjoys that.”

Update 1:25 pm ET, April 4, 2023: While Liz Rodwell received her PhD from Rice University, she is an assistant professor at the University of Houston. We've updated the story to reflect this.

Update 11:15 am ET, April 12, 2023: Good Smile has posted a statement on its Japanese-language website in response to “some media articles,” without identifying which ones. The statement reads, in part: “There were some media articles incorrectly stating that Good Smile Company has a partnership with 4chan, an anonymous Internet bulletin board. It is not true. We do not have a partnership with 4chan, never had influence over the management and/or control of 4chan. In fact, we severed any limited relationship we previously had with 4chan in June of 2022. Since then, we have not had any relationship with 4chan.”

Good Smile also said that “there were several other statements in the articles that are not true concerning our company,” but it said it will not detail these inaccuracies due to “confidentiality obligations based on contracts with third parties.”

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