ANIMATION AND VFX MARKET ANALYSIS

The global animation and VFX market size was valued at USD 167.89 million in 2021 and is anticipated to witness a compound annual growth rate (CAGR) of 13.7% from 2022 to 2030. The global animation and VFX market is witnessing strong growth it is primarily due to the exponential growth of online video viewers. The availability of low-cost internet access and increasing penetration of mobile devices have also increased the demand for immersive experiences. Moreover, consumers expect to see high-quality productions with realistic animation and visual effects.

Global Animation and VFX Market: Regional Insights

The global animation and VFX market is regionally divided into North America, Latin America, Europe, Asia Pacific, and Middle East & Africa.

North America among regions, is expected to dominate the global animation and VFX market over the forecast period. This is due to increasing technological developments, increasing investments by market players in anime movie production across the region. For instance, an OTT streaming service provider, Netflix is increasing its investments in anime shows and it has planned to release 40 new anime shows in 2021.

Furthermore, Asia Pacific is also anticipated to witness substantial growth in the global animation and VFX market during the forecast period, owing to growing market demand, and government policies, growing expansion of companies and rise in TV distribution in countries such as China. Moreover, the high penetration of smart devices, and increasing digitalization of content in the regions is also driving the market growth.

Figure 1: Global Animation and VFX Market Share (%), By Region, 2021

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Global Animation and VFX Market Drivers:

Rapidly growing hybrid animation with 3D enabled technology is expected to propel growth of the global animation and VFX market over the forecast period. Hybrid animation consists of blending 2D and 3D animation. This method has become one the most popular and is utilized by several designers and animators for creating short stories, cartoons, and other content. Thus, growing use of hybrid animation in global animation industry is expected to boost the market growth in the near future.

Moreover, increasing demand for visual effect in the multimedia industry is also projected to augment growth of the global animation and VFX market over the forecast period. Digital technology has become an important part of current digital media. Several platforms around the world are focusing on digitizing the digital media and in recent years, the digital media industry has witnessed a substantial growth, which is likely to continue in the future. Thus, rise in demand for visual effects in this multimedia industry is to propel growth of the global animation and VFX market.

Global Animation and VFX Market Opportunities:

Rapid expansion of gaming industry is expected to create several growth opportunities for players in the global animation and VFX market over the forecast period. Gaming industry is witnessing introduction of exciting tech innovations. With growing competition in the industry, market players and game developers have been focusing on launching software with better features and efficiency, and this factor is moving forward at a rapid pace. This in turn is expected to boost the demand for animation and VFX, which is expected to propel the market’s growth in the near future.

Growing rate of content streaming all over the world is also expected to create growth opportunities in the global animation and VFX market over the forecast period. With increasing content streaming, creators now can develop better content to compete in this sector. The storyteller community is increasingly experimenting with novel techniques to incorporate relevant and new technology in the media content. Moreover, market vendors are focused on speeding the process of animation and VFX, as it is time consuming. This is likely to boost the demand for VFX and animation. Thus, this factor is expected to support the market growth.

Global Animation and VFX Market Trends:

The global animation and VFX market is witnessing growing trend of surge in OTT adoption in developing countries during the COVID-19 pandemic. This trend is expected to augment growth of the market over the forecast period.  For instance, as per the data of India Brand Equity Foundation, the OTT demand has increased during the pandemic to 29 million subscription in July 2020, from 22.2 million subscription in March 2020 in the country. Thus, growing adoption of OTT is driving the market growth.

Furthermore, growing expansion of marketing and advertising domains is another trend in the global animation and VFX market. Due to development and growth of the media and entertainment industry worldwide, the marketing and advertising domains are evolving all over the world. As the television channels are increasing, the number of digital platforms, new technologies and social media channels is growing globally, and this further boosts the demand for animation and VFX. This trend is likely to continue in the market over the forecast period.

Global Animation and VFX Market Restraints:

The global animation and VFX market is expected to face challenges such as growing media and software piracy. Piracy and copyright infringement are the most controversial problems of digital industry. The current software markets are experiencing the most of the copyright issues, and this has become a major issue, which is affecting wages, jobs, tax revenues and even fund availability for R&D. Due to frequent piracies, SMEs become reluctant towards investment in the market. Thus, this factor is expected to restrain growth of the global animation and VFX market over the forecast period.

Storage concerns regarding animation and VFX production is another factor expected to impede growth of the global animation and VFX market over the forecast period. To create images that are photorealistic and can comprise several thousand of digital assets, the management of number of information is important, this becomes a major issue in the whole process. Many of the VFX studios rely on file storage system, which makes them prone to concerns such as scalability, performance, visibility and adaptability. Thus, need for larger storages in animation and VFX is expected to hamper the market growth.

Figure 2: Global Animation and VFX Market Share (%), By Animation Platform, 2021

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Global Animation and VFX Market Segmentation:

The global animation and VFX market report is segmented into Animation Platform and Region.

Based on Animation Platform, the market is segmented into Television and OTT, Films, Advertisement, Gaming, and Other Animation Platforms (Ed-tech, etc.). Out of which, Television and OTT is expected to dominate the global market over the forecast period and this is attributed to the increasing growth of content streaming all over the world is leading to growing adoption of novel techniques and cutting-edge technologies by content creators.

Films segment is also expected to witness significant growth in the near future and this is owing to the growing adoption of advanced technologies and new equipment in film industry, leading to development novel animated content. Narration in films is increasingly using visual effects and animations. The number of movies with computer graphics and special effects is increasing day by day, which further drives growth of this segment in the animation and VFX market.

Global Animation and VFX Market: Key Developments

In July 2021, Adobe entered into partnership with Blender on the development of new plugins and funds in 3D industry for ensuring products such as Mixamo and Substance 3D are available and accessible to as many consumers as possible.

In April 2021, Autodesk introduced 3Ds Max 2021 version, which focuses on textures and rendering as it leverages the improvement of performance. This version can support python 3 as well as scriptable baking, and CAD-related workflows. It also focuses on interoperability with CAD tools of Autodesk such as Revit and AutoCAD.

Global Animation and VFX Market: Key Companies Insights

The global animation and VFX market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global animation and VFX market are Bondware Inc., Adobe Inc., Planetside Software LLC, Autodesk Inc., Epic Games Inc. (Unreal Engine), IPI Soft LLC, Act-3D B.V., Exocortex Technologies Inc., Toon Boom Animation Inc., Lost Marble LLC, The Foundry Vision Mongers Ltd., Animaker Inc., Blender Foundation, and DWANGO Co. Ltd.