Limited Animation started in United States, but the technique had developed and flourished in Japan. Here, this technique was experimented a lot and new heights were achieved. During 1950s-1960s, Japanese cartoons made improvements on the production of the Limited Animation. Initially, the Japanese animators followed the Traditional method of animation like Disney. For example "Panda and the Magic Serpent" (Hakujaden 1958) by Studio Toei Doga.

The method was expensive and the competition from foreign studios like Disney made it even more difficult to continue with this Traditional method. Hence to cut down the cost Limited Animation method was adopted.
 

Unlike American Limited Animation, which started as an experimentation rather than cost cutting, the Japanese Limited Animation started as a cost cutting measure but later more artistic explorations were done. Based on the reducing of in-betweens, Japanese animators developed a new limited animation technique called "Back System". That is, placing drawings of the same scenes on file: to be used repeatedly. This way the cost became even lower.

TV was popular in Japanese homes and in the year 1963, the first Japanese TV cartoon series "Astro Boy" by Osamu Tezuka made its first show in this year. The animation even being limited, it had created a distinctive technique, with a unique character design. This animation style came into being with its distinctive name "Anime".
 

A new turning point of limited animation came from the ending of the 20th century, when digital animation art spread widely. GIF animation started and was mostly used for web. The gif animation was so "limited" that it usually composed of traditional key frame drawings, without in-betweens. Most of gif animations were cycle system. GIF animation could only be a short piece but not an artwork, it had to be 16 bit, and therefore, its maximum color pallet was 256 colors.

The real revolution came when macromedia Flash (now Adobe Flash) was popularized, more and more individual could product his or her own animation films on PC. Even the beginning of Video Games made this method popular. Now the use of this method has become common, it can be seen on Flash Animation, Motion Comics, PowerPoint animation etc.