Thunderbolt Fantasy shows the power of fully embracing your genre
One of the best shows that I watched this year technically isn't anime. Thunderbolt Fantasy is a Taiwanese high-fantasy wuxia puppet show from a renowned Taiwanese puppet company; it slides into anime because it's co-produced by some Japanese anime companies, written by Gen Urobuchi, has a soundtrack by Hiroyuki Sawano, and so on. Basically it's anime not because of looks but because of one side of its lineage.
It would have been easy for Thunderbolt Fantasy to be pretty bad. Wuxia is awfully close to the kind of action fantasy that anime gives us in relative profusion (often from light novels), and those shows are only rarely even moderately good. Sure, Pili International was not going to do a bad job on the looks of the show (assuming that you can accept puppets and special effects in general), but just as important as the looks is the writing and Gen Urobuchi has written any number of stinkers to go with his solid work. And high wuxia is itself an inherently absurd and over the top genre, one that can easily fall into overblown camp.
But Thunderbolt Fantasy is good, in fact very good. Fundamentally it's good in large part because everyone involved fully embraced its genre. If they were going to do larger than life wuxia, they weren't going to be half-hearted about it; they were going to go big and dive in all the way. But fully embracing a genre isn't just about playing whole-heartedly into its cliches and its nature. It's also about not being lazy and about taking it seriously. There are absurdities that fit and absurdities that don't and things that are just lazy, and you must navigate through them all with care. Over all, you have to care and as part of that caring, you must work hard and do good work. Lazy writing, lazy planning, half-hearted gestures, taking the easy route, all of those will show through and send a show like Thunderbolt Fantasy plummeting in flames. Shows that are inherently absurd are balanced on a knife edge; they cannot forget that they're absurd but they must also commit to doing the absurdity with quality. That's what it means to embrace your genre.
(I won't go as far as to say that you have to love what you're doing, but I'm sure that it doesn't hurt. I'm pretty sure that all of the people involved in Thunderbolt Fantasy loved the whole idea, especially on the Japanese side.)
Gen Urobuchi did not take the easy way out when he wrote Thunderbolt Fantasy, and the results speak for themselves. Sure, there are crazy things but they are wuxia-crazy so they fit (such as the character who cuts his own head off so he can properly report his defeat to his necromancer boss), the overall plot is well thought out, and it has plenty of smart writing. The characters are all wuxia characters but they're well drawn and you can believe in them, a couple of them get character arcs, and the dialog often sparkles. There are genuine surprises, real laughs, and an actual understated romance that feels believable in a wuxia way.
(And there's also a spear-point, but just managing a spear-point doesn't necessarily make a work good by itself. All sorts of bad stories can manage one good moment where everything comes together for once.)
Of course Thunderbolt Fantasy is not the only show to achieve excellent results by embracing its genre whole-heartedly and truly understanding itself. This year many people praise Mayoiga (which I haven't watched as horror-ish stuff isn't my thing), and back in 2014 there was Witch Craft Works. Probably there have been others in genres that I don't pay as much attention to.
(Perhaps what Witch Craft Works did was slightly different, but I think of it as basically the same thing. Sometimes earnest is the wrong tone to take to make a work really shine, and sometimes it's exactly what you need. In both cases you can't be lazy and take the easy way out when putting the show together; you have to both care and commit whole-heartedly to what you're doing. Like Thunderbolt Fantasy, Witch Craft Works had smart writing with good characters and good dialog, and fully leaned into its nature with heart.)
PS: If you want to get an idea if Thunderbolt Fantasy is your kind of thing, you can do a lot worse than watching Thunderbolt Fantasy's OP. It's basically perfect for the show and is a great distillation of the whole experience. Certainly if you hate the OP and find it completely eye-rollingly absurd and over the top, you're unlikely to like Thunderbolt Fantasy itself.
(This is a 12-days post.)
Why only a few people got character arcs in Thunderbolt Fantasy
Only a couple of characters in Thunderbolt Fantasy got actual character arcs, but I maintain that this is not a weakness in the show. Instead, in my opinion, it's due to differences in what sort of character everyone was. To simplify, dramatic characters change over the course of the story, while iconic characters reveal and/or affirm their essential nature.
As is relatively standard for wuxia, most of the protagonists in Thunderbolt Fantasy are presented as iconic characters. Over the course of the story they wind up revealing their nature and affirming it, but they don't change and so they don't have a character arc; their character is already set and for the most part the show doesn't bother giving them events that might provoke character growth in dramatic characters. This includes Shang, who is an iconic character even if his full nature is not revealed for most of the show.
(Perhaps the purest iconic character is the Screaming Phoenix Killer, who conceals nothing about himself and who constantly affirms his character throughout all his appearances, completely living his life according to his very wuxia iconic nature.)
Only two characters in Thunderbolt Fantasy are dramatic characters, Juan Can Yun and Dan Fei, and both of them get satisfying character arcs that see them growing and changing; they end the show as quite different people than they started. Indeed, Juan essentially forms his final character over the course of the show. I don't think it's an accident that they're the youngest and most innocent characters.
(It follows that it's deliberate that Thunderbolt Fantasy ends the show leaving them behind while the adventures of Shang and Lin Xue Ya continue. As dramatic characters who've experienced growth, their part in an overall story is done now. The iconic characters of Shang and Lin Xue Ya can continue on, running into more situations that let them affirm and reveal more of their essential natures.)
(I got this framing of dramatic, iconic, and picaresque characters from Robin Laws' writing (primarily) about tabletop RPG characters (eg iconic heroes, dramatic heroes, and picaresque heroes). I have paraphrased it here and so any mangling is my fault.)