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Animation and VFX Market Analysis

The Animation And VFX Market size is estimated at USD 176.08 billion in 2024, and is expected to reach USD 310.97 billion by 2029, growing at a CAGR of 12.05% during the forecast period (2024-2029).

The animation and VFX market is experiencing significant growth, primarily driven by the growing demand for high-end visual effects and animated content across the gaming, TV, and film industries, rising technological advancements in the VFX and animation sectors, and changing consumer preferences regarding immersive and high-quality content. New developments are shaping the global animation and VFX market, with the increased use of augmented reality (AR), real-time rendering, and virtual production techniques.

• Further, specific end-user industries, especially the film sector, are witnessing increased production values and budgets. This surge is attributed mainly to the expanding international distribution, partly facilitated by digital theatres. There's a growing willingness among writers and directors to adopt scripts that demand VFX. Consequently, production companies are chasing ambitious projects, necessitating VFX and streamlined platforms for realization. They have also diversified the genres of content being produced. These dynamics have significantly fueled the expansion of the VFX and animation market.
• Hybrid devices, merging functionalities like stylus-supported tablets for digital animation and laptops with 3D capabilities, are experiencing notable growth. These devices offer animators and VFX professionals the flexibility to create and render intricate designs efficiently. Such demand is especially pronounced in entertainment, gaming, and advertising sectors, where real-time rendering and animation quality are most important.
• These hybrid devices simplify the design, development, and execution of animations, eliminating the reliance on standalone high-end systems. Their inherent mobility and cloud-based software foster global team collaboration, accelerating production cycles. Consequently, there is a surging demand for software solutions and services that facilitate 3D animation on these platforms, propelling growth in the overarching animation and VFX market.
• Visual effects (VFX) have become essential in the entertainment industry, especially in film, television, and gaming. Studios increasingly invest in VFX to craft stunning, realistic visuals that elevate storytelling. High-budget films and TV shows, especially in action, fantasy, and science fiction, lean heavily on VFX to satisfy audience demands for quality and immersion.
• Animation and VFX companies face direct revenue impacts due to piracy in software and media. The unauthorized distribution of films, games, and software results in substantial financial losses. Such losses ripple through the animation and VFX sectors; when studios and production companies see their revenues dip, they often cut back on spending for visual effects and animation services. As profits reduce, companies become wary of investing in expansive VFX productions or hiring specialized talent, hindering market growth.
• Beginning in May 2023, the writer's and the actor's strike in July 2023 significantly influenced the global VFX and animation market. The writer's strike marked the most significant disruption to US television and film production since the COVID-19 pandemic. As the longest and most expensive strike in Hollywood's history, it led to widespread delays and disruptions across numerous TV shows and films. The subsequent actor's strike in July 2023 continued this trend, negatively impacting the broad entertainment industry.
• The writers' and actors' strike postponed or canceled numerous film and TV projects, directly impacting VFX and animation studios. These studios depend on a consistent flow of content, and the strike disrupted their production pipelines, resulting in reduced demand for VFX and animation work, negatively impacting the growth of the market.

Animation and VFX Industry Segmentation

The animation and VFX market is defined based on the spending of various end users in the VFX and animation market. The said industry is treated as a subset of the broader creative industries. The animation and VFX industries encompass pre and post-production, technology, machine learning, outsourcing, software products, and sales. The study is structured to track the demand for animation, VFX, and post-production services rendered by various studios globally. The analysis is based on the market insights captured through secondary research and the primaries. The market also covers the major factors impacting the market鈥檚 growth in terms of drivers and restraints.

The animation and VFX market is segmented by animation platforms (television and OTT, films, advertisement, gaming, and other animation platforms (Ed-tech, etc.)) and geography (North America, Europe, Asia Pacific, and the Rest of the World). The report offers market forecasts and size in value (USD) for all the above segments.