When local films do exceedingly well in Japan, celebrations follow. That was the case last week when Departures director Yojiro Takita, star Masahiro Motoki and the media gathered before a screening of the award-winning film at distributor Shochiku's flagship cinema in Yurakucho.

The modestly budgeted drama has stayed in the top 10 for eight weeks, grossing over $26m on 2.2 million admissions. The event highlighted the film's international success to date; the grand prix at the Montreal World Film Festival; the Golden Rooster for best picture in China; the audience award at the Hawaii International Film Festival; and Japan's official Oscar bid for best foreign film.

The display on stage indicated Japan's increased awareness of 'global success' in a market that has remained fundamentally self-sufficient. Small films that enjoy critical acclaim abroad, such as Cannes and Locarno winners The Mourning Forest and Rebirth, often barely register at their home box office. Conversely, most local megahits continuously fail to sell to English-speaking territories. Departures looks set to succeed in both arenas.

The Japanese film industry's 'official' $10.1m (Yen1bn) benchmark for a hit doesn't factor in a film's budget or screen count. When modest productions like Departures or 2007's I Just Didn't Do It reach the mark it is an achievement, but when a mega budget title such as last year's $25m Genghis Khan barely surpass it, it loses meaning. The new number that is being cited as the indicator of big business in the territory is $30.2m (Yen3bn). So far this year, 14 films have accomplished it - 10 of them Japanese. In comparison, the whole of 2007 saw nine imports and eight local titles hit the $30m target.

The most recent winner has been Fuji TV's Suspect X, which had held the pole position for four weeks, earning over $36m, until Red Cliff Part 1 dethroned it this week, another film likely to surpass $30.2m. During its run at the top of the table Suspect X held off all newcomers, including Hollywood release Eagle Eye and major homegrown title The Homeless Student. Strong word of mouth and a large fan base for the original TV series have seen admissions drop by less than 5% on two of its weekends - far less than the usual halving.

Despite a positive local scene, led by $150m giant Ponyo On The Cliff By The Sea, Hollywood films have failed to fill seats. The biggest import in 2008 has been Indiana Jones And The Kingdom Of The Crystal Skull, which only managed $57m. Global monsters such as The Dark Knight and Iron Man are relatively ignored in the territory where superhero films other than Spider-Man, and those with overly dark themes, do not connect with the audience.

With only three imports in 2008's top 10, local fare looks to reclaim the majority it enjoyed for the first time in 21 years in 2006, only to lose it the following year.

However, as screens and releases increase year on year, overall box office remains relatively flat. Results for the first three quarters of the year for the top 13 distributors, which represent approximately 95% of the market, totalled $1.5bn (Yen144.5bn), are down 3.1% from the same period last year. Of those 13, the territory's three major studios - Toho, Toei and Shochiku - earned 31.7% more in the same nine-month period.

Japanese cinema-goers are gravitating toward their own stories, but still only see 1.3 films per capita annually, compared to 3.3 in Korea and 4.6 in the US. With local distributors also handling Hollywood titles and exhibitors such as Toho showing them, they will need to perform better for a more stable, healthy industry.

Top Releases in Japan for 2008 (As of Oct 26)
Title (Prod/dist)BO Gross
Ponyo On The Cliff By The Sea* (Studio Ghibli/Toho)$151.1m (Yen15bn)
Boys Over Flowers TBS/Toho$77.6m (Yen7.7bn)
Indiana Jones And The Kingdom...(PPI)$57.5m (Yen5.7bn)
Pokemon 2008 (Toho)$48.4m (Yen4.8bn)
Partners: The Movie (Toei)$44.5m (Yen4.4bn)
I Am Legend # (WB)$43.3m (Yen4.3bn)
The Magic Hour (Fuji TV/Toho)$39.3m (Yen3.9bn)
20th Century Boys * (NTV/Toho)$37.9m (Yen3.8bn)
The Golden Compass (GAGA)$35.3m (Yen3.5bn)
Doraemon: Nobita To Midori No Kyojinten (Toho)$33.9m (Yen3.4bn)
Suspect X * (Fuji TV/Toho)$30.8m (Yen3.1bn)
* Still on release
# End of 2007 release