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But the old format only supports 255 characters, and there are, what, 1000+ kanji symbols?

About 4,000 in the JIS X0208 subset used by Karma and Nitrus. (Plus about 10,000 more in JIS X0213, plus several tens of thousand more if Chinese is also desired.) The v3a8 player fonts contain over 700 glyphs just in support of European languages.

Peter