GLOBAL VIRTUAL PRODUCTION MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Global Virtual Production Market Size and Trends

Global virtual production market is estimated to be valued at USD 2.84 billion in 2024 and is expected to reach USD 8.37 billion by 2031, growing at a compound annual growth rate (CAGR) of 16.7% from 2024 to 2031.

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Key factors such as increasing demand for content from TV and OTT platforms and advancement of technologies such as LED walls, 5G, and cloud computing are expected to boost demand for virtual production solutions. Adoption of virtual production makes the content creation process more cost-effective and time-efficient compared to traditional filming techniques. It also offers flexibility to film scenes virtually without requiring physical filming at expensive locations. As the entertainment industry is constantly evolving and the demand for enhanced viewing experience increases, virtual production is emerging as a highly effective production technique.

Expansion of visual effects and animation industry

Rising demand for high-quality visual effects and computer-generated animations from the film, television, and video game industries has been a key driver of growth of virtual production market. Studios have increasingly turned to computer-generated graphics and virtual sets to bring immersive stories and imaginative worlds to life. However, traditional production techniques can be costly and time-consuming for visual effects-heavy projects. Virtual production technologies allow studios to overlay digital elements onto real-time camera feeds during live-action shooting, enabling directors to achieve their visions more efficiently. This allows storyboards and concepts to be visualized and tweaked in real-time on set, streamlining the post-production process. As the expectations of audiences continue rising in terms of visual spectacle and immersion, production studios are under greater pressure to incorporate cutting-edge techniques. Virtual production presents an appealing solution as it brings together live-action filming with virtual cinematography in a more seamless manner.

For instance, the Animation, Visual Effects, Gaming, and Comic (AVGC) sector in India holds significant potential to push the growth of "Create in India" and "Brand India" initiatives. With the aim of capturing around 5% (approximately US$ 40 billion) of the global market share by 2025 and achieving an annual growth rate of 25-30%, it is estimated that over 160,000 new jobs will be created annually. To further boost the growth of the AVGC sector, the Union Budget 2022-23 announced the establishment of an Animation, Visual Effects, Gaming, and Comics (AVGC) Promotion Task Force. This task force will focus on recommending strategies to enhance domestic capacity to cater to both domestic and global demands. In line with this announcement, the Ministry of Information and Broadcasting has set up the AVGC Promotion Task Force to promote and support the growth of the AVGC sector in India.

Market Concentration and Competitive Landscape

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Gradual adoption of virtual production technologies beyond the traditional creative domains of film, television, and games is expected to drive the market growth. Architects and designers are increasingly experimenting with virtual production tools to convey spatial concepts and photorealistic renderings during the planning and prototyping stages of construction projects, retail spaces, and more. Advertisers also see potential for more immersive and engaging branded content through virtual production methods. Even the automotive and manufacturing industries are exploring applications to improve product development cycles. New sectors embracing virtual production techniques will be critical for ongoing expansion. The cross-industry appeal stems from the ability to accurately visualize, iterate, and test digital prototypes without constraints of physical building or production. This makes virtual production an attractive creative collaborative technology for diverse organizations.

For instance, in March 2022, Adobe announced collaborations with Epic Games, The Coca-Cola Company, NVIDIA, NASCAR, and others to position brands for success in the metaverse through breakthroughs in 3D content creation and immersive experiences.

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One of the major challenges faced by the virtual production market is lack of skilled workforce who are well-versed in both filmmaking and virtual technology. As the technologies involved are still quite new, there is a dearth of trained professionals who can seamlessly integrate virtual elements into live-action productions. This shortage of talent can limit the scope and scale of virtual productions. Other challenges include the high production costs of virtual stages and infrastructure required. Establishing virtual production capabilities requires significant upfront investments which may not always yield expected returns.

Market Opportunities: Surging Demand for Immersive Content

As technology gets better, it's likely that virtual production will become cheaper. Plus, there's a big desire for immersive content in things like movies, games, and interactive stuff. This is good news for visual effect studios and the tech that helps make super realistic virtual production happen.

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Hardware segment is estimated to contribute the highest share of the virtual production market of 63.2% in 2024, owing to its indispensable role in powering advanced virtual production technologies. Hardware components such as cameras, servers, storage devices, and processing units form the technological backbone that enables the sophisticated visual effects, real-time rendering, and seamless coordination of virtual and live-action elements at the core of virtual production workflows.

Powerful cameras are necessary to capture high-resolution footage suitable for compositing with computer-generated imagery. Cameras continue to evolve with advances like higher megapixel counts, wider dynamic ranges, and improved low-light performance to provide filmmakers with more flexible and nuanced live-action elements to integrate into virtual worlds. Servers and storage are also crucial for transmitting and housing massive datasets, as virtual production relies on real-time rendering of complex 3D environments. State-of-the-art server farms and ultra-fast solid state storage ensure smooth playback and rendering without latency issues.

Processing units further drive hardware demand as increasingly complex virtual production tasks require more computing horsepower. As techniques like real-time ray tracing and complex simulations become standard, next-generation graphics processing units (GPUs) and central processing units (CPUs) able to handle extensive parallel processing are proving indispensable. Hardware vendors continue upgrading components to deliver processing speeds sufficient for the massively data-intensive workflows of virtual production.

Insights, By Type- Pre-production Segment Dominates Through Design and Planning

Within the different stages of virtual production, the pre-production segment is estimated to contribute the highest share of 37.2% in 2024 owing to its focus on design and planning workflows. In the pre-production stage, rigorous asset creation and environment design lay the all-important groundwork for successful virtual production shoots. Tasks involved include 3D modelling and texturing virtual sets, locations, props and characters as well as programming realistic lighting, shadows, reflections and textures.

Comprehensive pre-visualizations using game engines and virtual cameras also fall under pre-production, allowing filmmakers to storyboard, block and rehearse scenes virtually before live-action filming. Rigorous pre-production ensures a stable technical and creative foundation upon which teams can seamlessly execute live interactive cinematography on set. Related services like previz, modeling, rigging, lighting and asset management thus prove extensive in terms of time and resources spent during this critical stage.

Insights, By End User- Movies Dominate as Virtual Production Grows Deployed Across Major Film Productions

Within end users, the movies segment is estimated to contribute the highest share of the virtual production market of 41.8% in 2024, due to growing deployment across major feature film productions. As visual effects have become increasingly sophisticated, virtual production techniques allow for seamless integration of CGI and live-action during filming itself through real-time rendered environments. This offers numerous advantages over traditional green or blue screen methods by providing filmmakers and actors with a fully immersive real-time virtual set to work within.

Big-budget blockbusters have especially leveraged virtual production workflows to tackle ambitious productions involving intricate visuals or dangerous locations. Examples include films like The Mandalorian, Avengers, Dune and many others that would be near-impossible or cost-prohibitive with traditional techniques. Virtual production continues gaining popularity in movies as it streamlines post-production, reduces costs and improves creative control during live-action shoots. As this transformative methodology becomes integral to major Hollywood productions, movies dominate virtual production spending and rollout.

Regional Insights

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North America is estimated to establish itself as the dominating region with market share of 34.4% in 2024, due  to the strong presence of technology giants and film production houses in the region. Countries like U.S. are home to leading virtual production solution providers like Unreal Engine and Epic Games who have made significant investments in developing cutting edge real-time rendering and game engine technologies.

Major Hollywood studios are early adopters of virtual production workflows and their demand for more immersive and practical filming techniques is driving the market growth. Regional production hubs like Los Angeles and Vancouver have emerged as centers for virtual production with several purpose-built virtual production stages coming up in recent years. The rapid growth of the streaming industry and strong funding for VFX and animation projects in the region are further supporting market expansion.

Asia Pacific, on the other hand, is witnessing the fastest growth and is expected to emerge as the new highest growing region with CAGR of 21.71% in 2024. Countries like China, India, South Korea and Japan are increasingly investing in virtual production infrastructure and training local talent. Cheaper labour and resource costs compared to Western markets are encouraging international filmmakers to consider the region for virtual production work.

China, in particular, has been aggressively promoting its visual effects and animation industries through favorable government policies. Virtual production fits well with China's ambitions of becoming a global leader in film and video game development. An increasing number of virtual production studios are being launched through public and private partnerships. For instance, the virtual production studio established by Slightly Mad Studios in China is one such example of Sino-foreign collaboration.

The growth in the region is also facilitated by rising disposable incomes that boostsdemand for high production value content across mediums like movies, TV shows, and advertisements. Overall, Asia Pacific's growing share of the global virtual production market can be attributed to strong government backing for digital industries, availability of skilled local talentpool and willingness to embrace new production technologies.

Market Report Scope

Global Virtual Production Industry News

• In August 2023, Mo-Sys Engineering announced the integration of Content Server Solution VP Pro XR LED at Solent University in Southampton, U.K. It features an LED wall and a Mimik lighting panel, offering a mix of lighting and cinematic reflections to enhance film production courses.
• In July 2023, ROE Visual partnered with Illusion XR Studio, Pixotope, and AVI-SPL to organize an XR broadcast in Dubai. The event aimed to provide immersive experiences and insights for content creators, TV and film professionals, broadcasters, and esports enthusiasts interested in the latest technology.
• In July 2023, Mo-Sys launched StarTracker Max, featuring top-notch real-time camera tracking capabilities. This solution enhances camera tracking precision and performance for virtual production, film production, and broadcasting.
• In May 2023, LG launched the LG MAGNIT micro-LED display for production studios. It offers improved content creation, picture quality, easy installation, and flexible operation.
• In May 2023, Autodesk introduced Autodesk Forma, a new industry cloud platform focusing on early-stage planning & design. It provides automation and AI-powered insights to simplify design exploration and evaluation for architects.
• In April 2023, Boris FX released advanced versions of Silhouette and Mocha Pro with enhanced paint, motion tracking, and rotoscoping capabilities for visual effects artists and compositors
• In April 2023, Boris FX acquired CrumplePop to complement its product line, including AI-focused audio plugins
• In September 2022, Adobe launched a cloud-driven collaboration solution for content shooting on virtual sets, developed in collaboration with Mo-Sys
• In September 2022, Epic Games and Autodesk announced a collaboration to accelerate immersive real-time 3D experiences, focusing initially on architecture, engineering, and construction
• In May 2022, Technicolor partnered with Paramount Pictures and director Jeff Fowler to create a fully computer-generated Sonic for Sonic the Hedgehog 2
• In April 2022, HTC VIVE released VIVE Mars CamTrack, a virtual production technology simplifying camera tracking workflows and enabling filmmakers to shoot in virtual backdrops

*Definition: Virtual Production Market is an online platform that allows movie and film producers to virtually produce their projects. Using cutting edge 3D animation and simulation tools, producers can design elaborate film sets, virtual locations, vehicles and props without having to physically build them. These can storyboard entire scenes, direct virtual actors through motion capture, and see pre-visualizations of the final production before embarking on expensive physical filming. This innovative market enables producers to prototype and test productions virtually to save massive costs and optimize.

Market Segmentation

• Component Insights (Revenue, USD Bn, 2019 - 2031)
  • Hardware
  • Software
  • Services
•  Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Pre-production
  • Production
  • Post-production
•  End User Insights (Revenue, USD Bn, 2019 - 2031)
  • Movies
  • TV Series
  • Commercial Ads
  • Online Videos
  • Others
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • South Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • 360Rize
  • 80six
  • Adobe
  • Arashi Vision Inc. (Insta 360)
  • ARRI AG
  • Autodesk Inc.
  • BORIS FX, INC
  • Epic Games, Inc.
  • FuseFX
  • HTC Corporation
  • HumanEyes Technologies
  • Mo-Sys Engineering Ltd.
  • NVIDIA Corporation.
  • Panocam3d.com
  • Pixar (The Walt Disney Company)
  • Pixotope
  • Side Effects Software Inc  (SideFX)
  • Sony Corporation
  • Technicolor
  • TREE Digital Studio
  • Vicon Motion Systems Ltd