Having never played the Ao Oni game which this is based on, I can't say whether this is par for the course or the equivalent of franchise vandalism.
Ao Oni The Animation Movie starts with three identical looking boys going camping and getting attacked by the 'Bellflower Monster', which we see in 2/3rds of its glory within the introduction (pretty much a faux pas whatever horror story you're talking about; the point is to keep the villain hidden in shadow as much as possible, not flaunt it like a new car). Some time later, a high school Anthropology Club decides to investigate the link between the Ao Oni flash game (some meta shit right there) and the Ao Oni legend, because apparently 'it doesn't sound like regular folklore' (except it literally does). Unfortunately, a visit to the game's creator is cancelled because of the creator's suicide, which strikes me as a really bizarre way of paying homage to the origins of the franchise, like if the next Avengers film had Stan Lee die of auto-erotic asphyxiation in the first fifteen minutes. Nevertheless, the club members start to investigate the history of the Ao Oni legend, and uncover a very terrible secret. Spoilers: it exists and it's in the school.
One of the main points of criticism levied against this film is the terrible CGI quality. I don't want to focus on that; not because it's not bad- the monster itself is more bemusing than unnerving, mainly because it looks like a creature from a late-90s tech-demo- but because there are actually more pressing issues you'd have to look past. Firstly, most if not all of the characters are carbon copy horror tropes (the 'playboy', the cutesy girl, the shy one, the smart one, the MC with zero personality, the dark brooding suspect, etc.) and the film's very abrupt and gory deaths, when apportioned, have disproportional impact because you simply won't care about anyone. Plot twists aren't uncommon as the cast tries to survive a night under siege by a blue-skinned demon, and some (by no means all) of them are even in danger of being original, but they're also frequently ludicrous and I really wish that this weren't a spoiler-free review so that i could talk about them. Get ready to stare and chuckle in disbelief, is all I'm saying, and I hope that the game's writing was somewhat more engaging, for the sake of its players.
Unfortunately (fortunately?) the voice cast actually tries to do its best with what its given, which lends an air of the tragic to proceedings that would otherwise just have been laughable. It's still laughable, though; the ending, which seems to have been controversial from what I've read on the subject, isn't the absolute worst I've ever seen in anime (somehow) but it still relies on bizarre exposition and isn't quite as 'oh shit' as it would like you to think it is. At least the film doesn't overstay it's welcome, clocking in at an hour, but if anything that seems like too much, as the first 20 minutes or so are taken up by a lot of sitting at tables, listening to tape recordings which then turn out to be undecipherable and thereby waste everyone's time, and set-up for a couple of romantic frissons which don't actually go anywhere.
TL;DR: I can't recommend this to horror fans, anime fans OR people with eyes and brains, in a general sense. If you're a fan of bad films or have a healthy investment in the franchise then maybe you'll squeeze some enjoyment out of this, and again, it's not long or especially arduous. But it's also terrible, so there's that.
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