Visual Effects (VFX) Market Size to Grow by USD 5.56 Billion | Increasing Demand for High-quality Content to Boost Market Growth | 17,000+ Technavio Research Reports

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Key Market Dynamics:

• Market Drivers

The increasing demand for high-quality content is notably driving the VFX market growth. Digital video content platforms such as Amazon Prime Video, Netflix, and Hulu have created the need for rich content and VFX of all kinds has gained significant popularity in recent years. Streaming service providers are also adopting the latest technologies such as VR and 360-degree and light-field capture, which use VFX. In addition, movie studios are trying to incorporate more animation and VFX- based shots into their films and television series. Studios are investing in VFX to develop feature-rich high-quality content and compete with other digital video streaming service providers, which, in turn, is expected to drive the growth of the global visual effects (VFX) market. In addition, other factors including surging real-time rendering in VFX production and the increasing number of acquisitions and partnerships will further fuel the market positively during the forecast period.

• Market Challenges

The storage issues for VFX rendering will be one of the key factors likely to challenge the market growth. Managing the volume of information used in generating a photorealistic image as a single photorealistic image contains hundreds to thousands of digital assets is one of the key challenges. As more and more VFX studios move to 4K and higher resolution imagery, there will be a requirement for the addition of extra storage capacities, which may lack interconnection between individual storage capacities. Lack of information on specific VFX modules in the rendering process further creates overall inefficiency and increases the time of the rendering process. Furthermore, high investments and low-profit margins and shortage of skilled personnel will further limit the market's growth in the long run.

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Key Segment Analysis

The VFX market report is segmented by Application (Movies, Television, Gaming, and Advertisements) and Geography (North America, APAC, Europe, MEA, and South America). The movies segment led the largest market share in 2020 and will continue to retain its dominance in the market during the forecast period. The movies segment is driven by the rising demand for realistic movie experiences by audiences and the growing popularity of VFX-based films. VFX is a technology used in the digital filmmaking process to enhance the representation of imaginary locations and altered characters. The use of VFX in the filmmaking process has led to new entertainment experiences with VR and 3D films. 

In terms of Geography, North America was the largest revenue-generating segment of VFX market in 2020. The region will remain the highest revenue contributor while capturing 39% of the market's growth during the forecast period. The US and Canada are the key markets for visual effects in North America. Market growth in this region will be faster than the growth of the market in Europe, MEA, and South America.

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Vendor Landscape

The VFX market is fragmented and the vendors are deploying growth strategies such as focusing on M&A and entering into partnerships with other players to compete in the market. Market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments. The market has significant growth opportunities, and the competition among vendors will intensify with the entry of new vendors, technological innovations, and the launch of advanced products. Established industry participants are focusing on M&A and entering into partnerships with other players to expand their product portfolio, enter emerging markets, and boost their market shares. For instance, in February 2019, Walt Disney announced its plan to launch Disney Plus digital video streaming services in November 2019. 

Some Companies Mentioned 

• Deluxe Entertainment Services Group Inc.
• Digital Domain Holdings Ltd.
• Digital Idea Corp.
• Eastman Kodak Co.
• Framestore Ltd.
• Hydraulx VFX Ltd.
• Rodeo FX Inc.
• Sony Corp.
• Technicolor SA
• The Walt Disney Co.
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Key Topics Covered:

• Executive Summary
• Market Landscape
• Market Sizing
• Five Forces Analysis
• Market Segmentation 
• Customer landscape
• Geographic Landscape
• Vendor Landscape
• Vendor Analysis
• Appendix

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