The misuse of soft power terminology for domestic political ends diminishes the complexity of the original concept and results in a simplistic cool Japan‚ÄövÑvp version of soft power. Despite numerous works acknowledging and discussing anime's soft power, there is a lack of audience study in this existing discussion. Policy is being informed by these interpretations of soft power, the international effectiveness of which relies on audiences behaving as anticipated. The absence of research into a variable as central as audience limits our understanding of how soft power functions in practice. Whether anime's soft power is articulated as cool Japan or as agitprop, assumptions are involved about audiences decoding anime according to the dominant-hegemonic reading. When audiences decode anime, they draw on their knowledge and experiences in ways which can result in negotiated or resistant readings. To test these ideas I have explored Hall's encoding/decoding model. Using textual analysis and interviews with Gundam's creator/encoder to identify a dominant, anti-war reading of Gundam Seed, I then conducted a focus group interview to observe the decoding practices of non-fan viewers. The focus group research presented in this thesis, although limited in scope, suggests that the assumptions inherent to the treatment of audience by popular soft power discourses are problematic, particularly when issues of warfare and memory are involved. I propose combining a cultural studies approach with existing research to achieve a more nuanced understanding of anime and soft power.