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Notes -
I've been thinking about this question a bit as well. My intuition (backed by no physical evidence) is that it comes down to something like:
cartoons characters are more aesthetically pleasing than even attractive humans on a visceral level
I don't mean to rehash the 2D vs 3D girl meme or say something like "people are generally sexually attracted to cartoons." I mean that characters depicted in cartoons are a kind of superstimulus in the same way that no real life Big Mac has ever compared to the Big Mac you see in McDonalds commercials. Some cartoons are drawn with "ugly" art styles and some characters are intentionally made to appear ugly in-universe, but for the most part characters in cartoons have qualities like flawless skin, big eyes (more exaggerated in East Asia but still present in the West), and perfect facial symmetry--the kinds of health markers people are intrinsically drawn to, especially at an early age. They're also a lot simpler information-wise than pictures of real humans, which is probably significant (maybe it makes them easier to process or something?).
the constraints of live action television tend to make it slower and less exciting
The most noticeable aspect of this is the cost of showing vs telling. In live action shows, this cost is very asymmetric--it's much cheaper to film a couple of guys talking for 10 minutes than to choreograph, record, and edit even a short scene where stuff actually happens. There are ways to make dialogue exciting or show instead of tell without breaking the bank in live action, but this kind of thing takes skill and creativity so a lot of live action shows end up being full of boring talking. It's also more expensive to do action than dialogue in cartoons, but my understanding is that the difference is a lot smaller, which biases cartoons toward action/showing and live action toward dialogue/telling. I'm past my prime cartoon-watching years, but I notice that my prior on "will this show be at least good enough to keep me engaged for 30 minutes" is still a lot higher for a randomly chosen cartoon than a randomly chosen live action series targeted at the same demographic.
Right, and even the setting is much more limited by the budget. If you shoot your movie in Louisiana, the cheapest movie you can shoot is a movie set in modern-day Louisiana. The further away you get from this setting, the more expensive your movie gets. Computer graphics help a lot to equalize the costs these days, but that's basically what animation has been doing for the last hundred years: you can release feature films set in Wonderland in 1951, Neverland in 1953, early 20th century all-American town in 1955 (with dogs that are way smarter than any Lassie or Rin-tin-tin).
And even the graphics don't help that much. The Rings of Power reportedly cost $58.1 million per episode, while Arcane cost $10 to $15 million per episode.
I'm not sure how much of that cost difference is due to animation vs live action, and how much is paying guild prices for an American product which was seen as a billionaire's bribe money to the Hollywood set. vs a tiny French animation company who from what I can tell farms out work to Korea and Indonesia the same way anime studios do now.
There's been some domestic American animations with stupidly high budgets for abysmal quality recently, but would have to check my notes for numbers.
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