Global Visual Effects (VFX) Market Report and Forecast 2024-2032

Global Visual Effects (VFX) Market Size

The global visual effects (VFX) market was approximately USD 35.59 billion in 2023. The market is estimated to grow at a CAGR of 12.9% during 2024-2032 to reach a value of USD 106.04 billion by 2032.

Visual Effects (VFX) Market Outlook

• VFX empower the creation of realistic and interactive videos and live-action footage. In 2022, the global OTT video revenue was estimated to be USD 116.5 billion and it is estimated to reach USD 174.6 billion by 2027.

• As per the visual effects (VFX) market analysis, in 2023, there were 3.22 billion video game players globally, a 4.21% growth compared to 2022. The growing gaming sector supports the visual effects (VFX) market development.

• VFX is undergoing a significant transformation with the adoption of real-time rendering techniques. This shift is fueled by advancements in powerful technologies like ray tracing and enhanced GPU capabilities.

Figure: Worldwide Box Office Collection for Leading Countries (in USD Million), 2023

Visual Effects (VFX) Market Growth

The VFX technology produces immersive visuals by integrating Computer-Generated Imagery (CGI), compositing, matte painting, and motion capture.  VFX-based scenes and elements blend in seamlessly with the live-action footage. Consumers’ growing demand for immersive content aids the demand of visual effects (VFX) market.

According to industry reports, in 2022, the global media and entertainment industry experienced a growth of 5.4% compared to the last year, culminating in revenues amounting to USD 2.32 trillion. Blockbuster films consistently rely on extensive visual effects and remain a significant attraction for viewers in cinemas and on streaming services worldwide. The gaming industry is also one of the major end users of VFX technology. In 2022, the global video games market reached USD 183 billion. The USA and China are the top markets for video games, together accounting for 49% of consumer spending on games. The USA registered a revenue of USD 46 billion and China USD 44 billion in the video games market in 2022.

Figure: Revenue of Top 4 Categories of Games (in USD Billion), 2022

Key Trends and Recent Developments

Growing adoption of technologies such as AI; the expanding gaming sector; growing movie production and video streaming; and the rising advertising sector are impacting the visual effects (VFX) market growth.

Mar 09, 2024

Ionart Studio Ltd announced to rebrand itself as Ionart Studios, establishing a new global identity as it aims to expand its business to North America.

Feb 13, 2024

As per the analysis of the visual effects (VFX) market, Milk VFX, the award-winning VFX studio, announced the opening of a new VFX studio in Dublin, Grafter–Ely House.

Jan 30, 2024

Whiskytree, a Californian VFX studio, announced the opening of a post-production facility in Georgia, to meet the rising demand for VFX services.

Mar 09, 2021

Wonder Dynamics launched Wonder Studio, an AI tool for the film and TV industry. Wonder Studio will enable filmmakers and storytellers to make CGI and VFX movies on a lesser budget.

Visual Effects (VFX) Market Trends

The major factors driving the market are the growing demand for high quality content and the growth of Over-The-Top (OTT) channels. The development of virtual reality (VR) and augmented reality (AR) experiences, as well as the current rollout of 5G networks, will further improve streaming and create new opportunities for the visual effects (VFX) market.

With the incorporation of artificial intelligence and machine learning, VFX artists capture and analyse real-world movements and behaviours. Artificial Intelligence is transforming the landscape of the) market, leading to advancements in the creation of lifelike 3D models and streamlining production processes.

VFX plays an important role in the video game market by providing an immersive experience to gamers. China and the USA are the biggest video games markets. Mobile gaming accounts for approximately 70 per cent of the total revenue generated by video games, globally.

Growth of the video streaming sector and need for high-quality content

In 2022, the global OTT sector incurred revenue of USD 116.5 billion. Video streaming players such as Netflix, Amazon Prime Video, Hulu, and Disney+ are offering intriguing series and movies that aid the applications of VFX and further boost the visual effects (VFX) market value.

Incorporation of Artificial Intelligence (AI) and Machine Learning (ML)

With the incorporation of these technologies, visual effects artists can analyse and recognise scene aspects, including objects, textures, and lighting. In addition, AI algorithms can be employed to produce high-quality graphics.

Growing application of VFX in video games

VFX in video games employs a variety of techniques and technologies to generate realistic simulations of diverse aspects including lighting, textures, particles, and physics. In 2022, U.S. and Chinese consumer spending on video games was USD 90.4 billion.

Expanding advertising sector

In the advertising sector, VFX enables businesses to create eye-catching and immersive representations. This helps brands grab consumer attention and create a unique brand image, which aids visual effects (VFX) market development.

Industry Outlook

The global visual effect (VFX) market is being driven by the growth of the film, television and advertising sectors. In 2022, India stood at the top position with the production of 2,497 feature films, reflecting its robust and prolific film industry, which is the largest in the world by volume. The United States followed India, producing 834 feature films, showcasing its significant output in Hollywood, which remains a major global entertainment hub. As per the visual effects (VFX) industry analysis, Japan ranked third with 634 feature films, indicating a strong domestic film industry that produces a diverse range of content. China is fourth, with 485 feature films, highlighting its growing influence and investment in film production as part of its expanding entertainment sector. Spain rounds out the top five with 322 feature films, underscoring its vibrant film industry within Europe.

According to IBEF, the India Media and Entertainment Market was valued at USD 23.01 billion in 2019 which can contribute to the visual effects (VFX) industry revenue. By 2022, it had increased to USD 25.83 billion, demonstrating a steady growth pattern. For 2024, the market is projected to reach USD 30.76 billion, and USD 37.20 billion by 2026.

The expansion of the gaming sector across the globe is contributing to the market growth. In 2023, China stood as a top country in global game revenue market with a remarkable USD 32,536 million. This dominant position underscores China's massive gaming industry, driven by a large population of gamers and significant investments in both mobile and PC gaming sectors and further fuels the growth of the visual effects (VFX) industry. The United States ranked second with game revenues amounting to USD 25,426 million, while Japan held the third spot with USD 14,048 million, showcasing its robust gaming culture and influential game development industry. South Korea, known for its advanced gaming and esports scene, followed Japan with USD 4,203 million in revenues. Germany follows closely in fifth place with USD 4,430 million, indicating a substantial market in Europe for gaming.

Growing Film and Advertising Sector Supporting Global VFX Market Growth

• Rapid innovation in VFX technology, including real-time rendering, virtual production, and AI-driven effects, enhances quality and efficiency.

• Increasing demand from the film, television, gaming, and advertising industries drives continuous visual effects (VFX) demand forecast.

• A wide availability of skilled professionals and specialized studios around the world supports diverse and high-quality VFX production.

• Established relationships with major film studios, production companies, and streaming platforms to provide a steady flow of projects and collaborations.

• VFX can be applied across multiple media, including live-action films, animation, commercials, and virtual reality, offering broad market opportunities.

The Capital Intensive Nature of VFX Impacting the Global VFX Market

• VFX production is capital-intensive, requiring substantial investments in technology, software, and skilled labour, which can limit profitability and negatively impact visual effects (VFX) demand growth.

• VFX projects often have tight deadlines and complex requirements, leading to high-pressure work environments and potential for delays.

• The market is highly dependent on the budgets of film studios and production companies, which can fluctuate based on economic conditions.

• Inconsistent quality across different studios and projects can affect client satisfaction and industry reputation.

Growing Technological Advancements Shaping the Global VFX Market

• The rise of streaming platforms like Netflix, Amazon Prime, and Disney+ creates more opportunities for VFX content production.

• Growth in emerging markets such as India, China, and Southeast Asia presents new opportunities for VFX studios to expand their client base.

• As per visual effects (VFX) market dynamics and trends, increasing adoption of VR and AR technologies offers new avenues for VFX applications in gaming, training, and immersive experiences.

• Growing use of VFX in advertising and digital marketing campaigns provides additional revenue streams.

• Advances in remote collaboration tools enable studios to tap into global talent pools and work on international projects more efficiently.

Economic Fluctuations Can Pose Threats to the Global VFX Market

• Economic instability and downturns can lead to reduced budgets for entertainment and advertising, impacting demand for VFX services.

• Illegal distribution of content can affect revenue, pose challenges in protecting intellectual property and decrease visual effects (VFX) demand.

• Staying current with the latest technology requires continuous investment, and failure to do so can result in obsolescence.

• The market is highly competitive, with many players vying for the same projects, which can lead to price wars and reduced margins.

• Despite a global talent pool, there can be shortages of highly specialized skills, impacting the ability to deliver complex projects on time.

Key Price Indicators in Global VFX Market

• Prices of advanced software and hardware, including rendering systems and motion capture technology, impact overall production costs and growth of the visual effects (VFX) market.

• Wages and availability of skilled VFX artists and technicians affect project budgets.

• The complexity and scope of VFX work required for a project significantly influence pricing.

• Operational expenses, including rent, utilities, and administrative costs, contribute to the pricing structure.

• Shorter deadlines can lead to higher costs due to the need for overtime and accelerated work schedules.

• Costs vary by region, influenced by local economic conditions, labor rates, and regulatory environments.

• Budget limitations set by clients can dictate the pricing and scope of VFX services.

Key Demand Indicators in Global VFX Market

• Increasing production of movies, TV shows, and streaming content drives the demand for VFX services and offers lucrative visual effects (VFX) market opportunities.

• Growth of streaming services like Netflix, Amazon Prime, and Disney+ boosts demand for high-quality VFX to attract and retain subscribers.

• Expanding video game industry, including AAA games and mobile games, requires advanced VFX for immersive experiences.

• Rising use of digital and interactive advertising campaigns leverages VFX to create engaging content.

• Growing adoption of VR and AR technologies in gaming, training, and simulations increases the need for VFX.

• High-grossing blockbuster films often require extensive VFX, leading to increased demand.

What Major Factors Are Influencing the Competitive Landscape of the Global Visual Effects (VFX) Market?

• The adoption of advanced VFX software and hardware, such as real-time rendering, AI-driven effects, and virtual production, plays a crucial role in staying competitive and increasing visual effects (VFX) market revenue.

• Continuous innovation and development of new techniques and tools can provide a competitive edge.

• Increasing consumer demand for visually stunning and high-quality content drives competition.

• Ability to quickly adapt to changing market trends and consumer preferences is key to staying relevant.

Visual Effects (VFX) Industry Segmentations

“Global Visual Effects (VFX) Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Component

• Software

• Hardware

• Services

Market Breakup by Production Method

• Modelling

• Matte Painting

• Others

Market Breakup by Application

• Movies

• Television

• Gaming

• Advertisements

• Others

Market Breakup by Region

• North America

• Europe

• Asia Pacific

• Latin America

• Middle East and Africa

Visual Effects (VFX) Market Share

Based on component, services dominate the market share due to the increasing demand for professional services from various end use industries leveraging VFX

One crucial trend in visual effects (VFX) market is a list of services offered to develop attractive visual effects that instantly captivate the target audience. The services include special effects for live-action scenarios, digital effects to create realistic environments, matte paintings that serve as the background for digital sets, the creation of 3D models of props, and combining different effects to form a single visual, among others.

By application, movies account for a significant share of the global visual effects (VFX) market

The need for streamers and studios to fill their catalogues with original content is supporting the demand for real-time computer-generated imagery (CGI) and visual effects. VFX costs on a high-budget sci-fi/fantasy film can be around 20% of the total film budget.

The VFX in television enables producers to expand their creative boundaries and meet heightened audience expectations which can aid visual effects (VFX) market expansion. The VFX technology aids the production of immersive fantasy sagas, science fiction dramas, and television series.

Visual effects improve the authenticity of a game and are produced using specialised software and graphics. These tools create life-like motions and effects in gaming situations, providing an immersive experience for gamers.

Competitive Landscape

The market players are introducing novel technologies and are increasing their collaboration efforts to strengthen their market position

The Foundry Visionmongers Ltd

The Foundry Visionmongers Ltd, founded in 1996, is a distinguished company based in London, United Kingdom. Some of its specialities include VFX software development, texture painting, video postproduction, and video editing.

Blender Foundation

Blender Foundation is an independent public benefit organisation for visual effects (VFX) industry, based in Amsterdam, Netherlands. Some of its specialities include Open source 3d graphics software and computer animation.

Autodesk, Inc.

Autodesk, Inc., is a software company based in California, United States. The solutions provided by the company include digital prototyping, consumer software, and 3D design software.

Side Effects Software Inc.

Side Effects Software Inc. is a software development company established in 1987. Some of its product offerings include VFX animation, 3D tools for movies, shows, and games.

Other notable players operating in the global visual effects (VFX) market include Cinesite, Digital Domain, Framestore Limited, Rodeo FX, Inc., RISE FX GmbH, Animal Logic Group, The Walt Disney Company, Warner Bros. Entertainment Inc., BluBlu Studios, and Red Chillies Entertainments, among others.

Visual Effects (VFX) Market Regional Analysis

North America is one of the key regional markets for visual effects (VFX). The growth of streaming as a form of content consumption across North America aids the demand for high-quality film and television productions. Currently, Canada has around 100 VFX studios. Vancouver and Toronto are hubs for several animation and VFX service providers. In 2023, the average movie production budget of the USA, the top movie-producing country globally, was around USD 95 million. The country produced 1,282 movies in 2023.

The gaming market in Europe is a significant contributor to the expansion of visual effects (VFX) market. In 2022, consumers spent around EUR 24.5 billion on video games across various European markets, an increase of around 5% compared to both 2021 and 2020.

With the Asia Pacific, India and China are significant VFX revenue-generating markets. The affordable data costs in these countries are a primary factor behind expanding their telecom internet user base, which drives the demand for digital entertainment, including online videos, audio streaming, and gaming.

Key Highlights of the Report

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Visual Effects (VFX) Market Report Snapshots

Visual Effects (VFX) Market Size

Visual Effects (VFX) Market Trends

Visual Effects (VFX) Market Growth

Visual Effects (VFX) Market Share

Visual Effects (VFX) Market Regional Analysis

Visual Effects (VFX) Companies