Animation and VFX Market is expected to grow at a CAGR of over 9% during the forecast period 2021 to 2026. The demand for animation and VFX has expanded with the increase in the emergence of the media sector gearing up significantly in the sphere of the multimedia ecosystem.
- There are majorly two trends driving the adoption of animation and VFX solutions. For the particular end-user industries, especially films, there is a general upward trend in production value or budgets. This is primarily due to broader international distribution in part to digital theatres. Secondly, writers and directors are now more open to embracing scripts requiring VFX. Production companies hence increasingly pursuing more ambitious products that can only be fulfilled with the use of VFX and streamline platforms, have also broadened the genres of content being published.
- The surge in 3D-UHD animated movies in theatres through the application of animation and VFX in TV, advertising and gaming along with the growth in the outsourcing of VFX process due to cost-effectiveness thereby focusing on the kids-genre and the growing popularity of streaming video are expected to fuel the market demand across the emerging economies.
- The integration of new OTT services across the existing subscription-based streaming devices among the emerging economies is expected to drive the applications of the animation & VFX sector. The companies are continuously involved in introducing new services for animation and VFX dedicated to OTT contents. For instance, in May 2019, London-based DNEG has launched its new service offering called ReDefine. The service is aimed at filling the gap between East and the West for creative services for film and Over The Top (OTT) content for streaming.
- With the ongoing outbreak of COVID-19 across the world, companies in the industry are taking a toll on post-production activities as the pandemic has disrupted by halting the production stage. Companies such as China-based Base FX, are looking for strategic partnerships for investments to survive in the turbulence. In January 2020, major Chinese SunacCulture announced a strategic investment in Base FX by taking a majority stake. Base FX has mentioned that the production is down by over 70% against the previous year in China, and there will be no films starting in China for at least the next six months.
Major Market Trends
Media Segment is Gaining Traction Due to Emergence of Online Streaming
- Nowadays, consumers are engaging in high-definition visual experiences. Movie-goers are demanding high-quality productions with engaging visual effects and realistic animation and studios, which includes more animation and VFX shots into films. Also, consumers are consuming more immersive content across channels such as ultra-high-definition TVs, tablets, and smartphones to head-mounted devices. Animation, VFX, and games content is being consumed not only on OTT streaming services such as Netflix, Amazon Prime, and but also on YouTube, Twitter, and Facebook.
- With the growing internet penetration and access to multimedia devices, customers are spending more time streaming digital content, due to which streaming video has become the fastest-growing segment in the distribution channel for animation, thereby witnessing a high-growth and is expected to continue during the forecast period.
- Further, cloud computing is playing a pivotal role in character rendering, and modeling processes as the cloud-based rendering of animation films are more effective and efficient as it reduces the time and cost compared to traditional rendering, which is expected to fuel the market growth during the forecast period.
Asia-Pacific to Register the Fastest Growth During the Forecast Period
- The APAC region has highly emphasized on the formalization of professional services across the animation and VFX to support the ever-growing media and entertainment industry. Countries such as New Zealand and Singapore have emerged as a hub for VFX artists, as these countries have an ecosystem for animation and VFX schools that offer advanced education in various streams.
- The growth in the consumption of more immersive content across multiple channels such as ultra-high-definition TVs, tablets, and smartphones to head-mounted devices is also propelling the demand of the animation and VFX market, especially across the China region during the forecast period.
- In July 2019, beauty brand Shiseido based in Japan entered into the skincare market by launching a personalized high-tech moisturizer and serum called Optune. The products are formulated by pairing augmented reality (AR) and Artificial Intelligence (AI). The company claims it to be the first IoT smart appliance system in the beauty space combining the intelligent app with a physical dispenser, by leveraging the animation and VFX techniques.
- Though China dominates the gaming sector, Japan is the third-largest market according to game revenue and generates over USD 14 million a year. The gaming companies in the country are some of the significant adopters of animation and VFX solutions at a global level.
The Animation and VFX market is moderately competitive and consists of a few major players. However, with the advancement in the animation technology across the professional services, new players are increasing their market presence, thereby expanding their business footprint across the emerging economies. Significant Players include Adobe Inc., Autodesk Inc., Smith Micro Software Inc., among others.
- April 2020 - Autodesk released 3Ds Max 2021 version. The latest version from the company focuses on rendering and textures by leveraging the improvements in performance. The version also added support for python 3, scriptable baking, and more focus on CAD-related workflows and interoperability with Autodesk’s CAD tools such as AutoCAD and Revit.
- December 2019 - Autodesk announced a release of Maya 2020. The new version is featured with original animation, rendering, effects, modeling and rigging advancements to empower artists throughout the production pipeline.
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1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Technology Snapshot
5 MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Rapid Growth in Hybrid & Animation Devices with 3D Enabled Technology
5.1.2 Growing Demand of Visual Effect Across the Multimedia Sector
5.2 Market Restraints
5.2.1 Growth in the Software & Media Piracy
5.3 Assessment of Impact of COVID-19 on the Industry
6 MARKET SEGMENTATION
6.1 By Type
6.1.1 2D (Vector-Based)
6.1.2 3D (CGI)
6.1.3 Motion Graphics (Typography)
6.1.4 Stop Motion (Photographing)
6.1.5 Other Types
6.2 By End-User Industry
6.2.1 Media & Entertainment
18.104.22.168 Online Gaming
22.214.171.124 Platform Based Gaming
6.2.3 Other End-Users
6.3.1 North America
6.3.4 Rest of the world
7 COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Adobe Inc.
7.1.2 Autodesk Inc.
7.1.3 iPi Soft LLC
7.1.4 Clara.io (Exocortex Technologies Inc.)
7.1.5 Smith Micro Software Inc.
7.1.6 Serif Ltd.
7.1.7 DWANGO Co. Ltd.
7.1.8 Blender Foundation
7.1.9 Synfig Studio
7.1.10 Toon Boom Animation Inc.
7.1.11 Act-3D B.V.
7.1.12 Epic Games Inc. (Unreal Engine)
7.1.13 Planetside Software LLC
7.1.14 Bondware Inc.
8 INVESTMENT ANALYSIS
9 FUTURE OF THE MARKET
- Adobe Inc.
- Autodesk Inc.
- iPi Soft LLC
- Clara.io (Exocortex Technologies Inc.)
- Smith Micro Software Inc.
- Serif Ltd.
- DWANGO Co. Ltd.
- Blender Foundation
- Synfig Studio
- Toon Boom Animation Inc.
- Act-3D B.V.
- Epic Games Inc. (Unreal Engine)
- Planetside Software LLC
- Bondware Inc.