Global Animation and VFX Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Animation and VFX Market is segmented by Type (2D, 3D, Motion Graphics, Stop Motion), by End-user Industry (Media & Entertainment, Gaming), and Geography.

Market Snapshot

Animation and VFX Market
Study Period: 2019- 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 9 %

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Market Overview

The Global Animation and VFX Market is expected to grow at a CAGR of over 9% during the forecast period 2021 to 2026. . 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 and this has shown a partially negative effect on the market.

  • There are majorly two trends driving the adoption of animation and VFX solutions. There is a general upward trend in production value or budgets for the particular end-user industries, especially films. 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 the 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 content. For instance, 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.
  • 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. Companies such as China-based Base FX are looking for strategic partnerships for investments to survive in the turbulence. In 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.

Scope of the Report

VFX or Visual Effects are a way of mixing real film shooting with false or animated images. Almost every single movie these days uses VFX. Recent technological advancements in 3D animation technology have fueled the growth of High-Definition (HD) videos along with extensive usage of 3D animated videos across multiple end-user sectors to create a graphic illustration of the working of individual components that are expected to be the key factors propelling the market growth. The Animation and VFX Market is segmented by Type (2D, 3D, Motion Graphics, Stop Motion), End-user Industry (Media & Entertainment, Gaming), and Geography.

By Type
2D (Vector-Based)
3D (CGI)
Motion Graphics (Typography)
Stop Motion (Photographing)
By End-User Industry
Media
Entertainment
Gaming
Other End-Users
By Geography
North America
Europe
Asia Pacific
Rest of the world

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Key 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 are being consumed on OTT streaming services such as Netflix, Amazon Prime, and YouTube, Twitter, and Facebook.
  • With the growing internet penetration and access to multimedia devices, customers spend more time streaming digital content. Streaming video has become the fastest-growing segment in the distribution channel for animation, thereby witnessing high growth and is expected to continue during the forecast period.
  • Further, cloud computing plays a pivotal role in character rendering, and modeling processes as the cloud-based rendering of animation films are more effective and efficient. It reduces the time and cost compared to traditional rendering, which is expected to fuel the market growth during the forecast period.
  • The entertainment and media industry has raised high demand for 3D animation with increased adoption in recent years. Besides enhanced 3D animation and visual effects adoption, the industry has been pushing the global market based on other essential factors.
  • Furthermore, The introduction of AI, VR, and AR could boost the global 3D animation market. 3D animators employ artificial intelligence (AI) and natural language processing in conjunction with a cognitive modeling method to enhance and virtualize the animation process to control the simulation and user experience in 3D games. On the opposite side, there is a growing interest in viewing animated films in virtual reality.
Global Animation and VFX Market

Asia Pacific to Register the Fastest Growth During the Forecast Period

  • The Asia Pacific region has highly emphasized the formalization of professional services across 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 animation and VFX market demand, especially across the China region during the forecast period.
  • The development of numerous training programs, software, and e-learning platforms employing simulated information and videos in the curriculum of this region is expected to drive considerable growth in the education and academics industry. Many educational institutions intend to integrate simulation technology into their educational systems, providing students with a more advanced learning environment.
  • The application of simulation technology across the country's well-established anime business resulted in a considerable revenue share for the Japanese market within the region. Furthermore, the Asia Pacific region's abundant qualified workforce leads to a low cost of production, propelling regional market expansion.
  • 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.
Global Animation and VFX Market

Competitive Landscape

The Animation and VFX market is moderately competitive and consists of a few major players. However, with the advancement in animation technology across 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.

  • June 2021 - The Associated General Contractors of America (AGC) and Autodesk launched the Construction Diversity Image Library, a set of photographs for use by the media featuring different individuals in the development workforce. The library will launch with an organized group of images, and as part of the initiative, companies from across the design, engineering, and building business.
  • March 2021 - Autodesk, Inc. has announced the global release of Autodesk Takeoff, a new solution that allows estimators to perform 2D and 3D quantification procedures from a single data environment, improving collaboration, speed, and accuracy during the estimation process. Autodesk Takeoff, first unveiled at Autodesk University in November 2020, will be a part of Autodesk Build and Autodesk BIM Collaborate.

Recent Developments

  • July 2021 - Adobe announced the Adobe Analytics curriculum for education, a global initiative that equips the next generation of data scientists with in-demand skills. College professors and students will be able to use Adobe Analytics—the industry-leading customer data analytics platform—for free as part of the next iteration of the Adobe Education Exchange and have access to course curricula with hands-on activities.
  • March 2021 - iPi Soft Announces new enhancements and development tools for its Unreal Engine called iPi Motion Capture. These enhancements include animation streaming into Unreal Engine, motion transfer to the 3D character, and real-time motion tracking; this allows creators to see real-time motion working in their particular 3D setting and on their character in Unreal Engine.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Buyers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitute Products

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Technology Snapshot

    4. 4.4 Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Rapid Growth in Hybrid & Animation Devices with 3D Enabled Technology

      2. 5.1.2 Rapid Growing Demand of Visual Effect Across the Multimedia Sector

    2. 5.2 Market Restraints

      1. 5.2.1 Growth in the Software & Media Piracy

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Type

      1. 6.1.1 2D (Vector-Based)

      2. 6.1.2 3D (CGI)

      3. 6.1.3 Motion Graphics (Typography)

      4. 6.1.4 Stop Motion (Photographing)

    2. 6.2 By End-User Industry

      1. 6.2.1 Media

      2. 6.2.2 Entertainment

      3. 6.2.3 Gaming

      4. 6.2.4 Other End-Users

    3. 6.3 By Geography

      1. 6.3.1 North America

      2. 6.3.2 Europe

      3. 6.3.3 Asia Pacific

      4. 6.3.4 Rest of the world

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 Adobe Inc.

      2. 7.1.2 Autodesk Inc.

      3. 7.1.3 iPi Soft LLC.

      4. 7.1.4 Clara.io (Exocortex Technologies Inc.)

      5. 7.1.5 Smith Micro Software Inc.

      6. 7.1.6 Serif Ltd.

      7. 7.1.7 DWANGO Co. Ltd.

      8. 7.1.8 Blender Foundation

      9. 7.1.9 Synfig Studio

      10. 7.1.10 Toon Boom Animation Inc.

      11. 7.1.11 Act-3D B.V.

      12. 7.1.12 Planetside Software LLC

      13. 7.1.13 Bondware Inc.

    2. *List Not Exhaustive
  8. 8. INVESTMENT ANALYSIS

  9. 9. FUTURE OF THE MARKET

**Subject to Availability

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Frequently Asked Questions

The Animation and VFX Market market is studied from 2019 - 2026.

The Animation and VFX Market is growing at a CAGR of 9% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

Adobe Inc., Autodesk Inc., iPi Soft LLC., Smith Micro Software Inc., DWANGO Co. Ltd. are the major companies operating in Animation and VFX Market.

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