WMG / Isle of Dogs

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The "dog flu" will be revealed to be non-existent.

The mayor hates dogs, and he made it up as an excuse to get rid of them.

• That would explain why Atari is able to interact with the dogs. The words of a powerful figure can have a huge effect on many people, but surely an intrepid young boy like Atari would be willing to find out for himself.
  • Jossed. See below.

Alternatively, the flu is real... because the mayor engineered it.

Similar to the above theory, he hates dogs and wants to get rid of them, so he secretly hired some biotechnicians to create a disease that they could spread through dogs as an excuse to take them away. If this is true, maybe Atari has either gained immunity to the flu, or is suffering from symptoms that aren't outwardly visible.

• Confirmed. The entire Dog Flu outbreak, and the anti-dog hysteria around it, was engineered by the Kobayashi Dynasty.

Alternatively, the flu doesn't exist, but the mayor doesn't hate dogs.

He's sent the dogs to the isle and introduced an intelligence-boosting drug of some sort to the food supply to create an army of super-intelligent dogs to overthrow the Prime Minister of Japan, declare himself Emperor, and use the dog army to get revenge on the United States for World War II.

• Jossed. The Kobayashi Dynasty all despise dogs (being fanatical cat lovers), and plan to replace them with the robot dogs.

It wasn't the mayor's idea to get rid of the dogs.

If you watch the trailer again, notice how the mayor has this Gríma Wormtongue-esque assistant. Maybe that assistant is the one who hates dogs and manipulated the mayor into the thinking the "dog flu" is real. And the mayor, being none the wiser, believed him and made the order to remove all dogs, genuinely believing he's doing what's best for the people.

• Jossed. The mayor holds a meeting with his staff starting with, "As you know, we all hate dogs." He then proceeds to list off their individual achievements in the plan to eliminate Megasaki's dogs, including deliberately introducing infected fleas and other parasites into the city. It's still possible that Major-Domo gave him the idea initially, but Mayor Kobayashi definitely hates dogs, and dog flu is indeed real in-universe.

This is the beginning of the Black Mirror episode Metalhead.

The mechanical dogs the Mayor creates eventually get more advanced and end up running amok and hunting people

The mayor's assistant is an incarnation of Odio.

For one, Watanabe died, Watanabe always dies when Odio is involved. The reason Odio never called the characters from this time period into the final chapter is because this Odio incarnation wasn't killed in battle, but simply imprisoned.

• You can argue his name fits when saying it slowly (Major-domo > Majordomo > Ordomo > Odio).

Atari is able to understand animals to an extent.

Mainly because his reactions occasionally seem to indicate this. Could be an innate ability, could be a result of having a piece of metal jammed into his skull, could just be the filmmakers helping to move the plot along. Although this would also explain How Chief gets a tag that says "Chief" at the end.

Mayor Kobayashi had Atari's parents killed to make himself look good.

Considering that Kobayashi was trying to look good for the people of the city, having his family murdered by someone and making it look like an accident makes a lot of sense. However, what he didn't expect was Atari to survive the "accident" and Atari's adoption also aided in making him look good, making him appear to be a dutiful and honorable person by adopting his now orphaned nephew. This could lead to making himself look good enough for his plan to eradicate the dogs.

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