The global virtual production market size was valued at USD 1,260.5 million in 2019 and is projected to register a CAGR of 15.8% from 2020 to 2027. Virtual production enables filmmakers to interactively visualize and explore digital scenes such as realistic virtual characters, three-dimensional graphics, and a real-time virtual interactive background environment within the studio. Vast developments in the field of virtual production over the years have led to the introduction of solutions that allow filmmakers to transfer the motion-captured movement of an actor to virtual characters, which are then previewed in real-time, in combination with live-action footage and virtual set extension elements. Such solutions help filmmakers plan and communicate their creative ideas in new and more intuitive ways. The increasing demand for visual effects (VFX) in movie production studios worldwide and the rising application of virtual production in commercial ads are likely to drive market growth over the forecast period.
The increased adoption of the LED video wall technology is augmenting the implementation of virtual production across the media and entertainment sectors. LED video walls display computer-generated graphics in the background and enable filmmakers to capture visual effects in real-time. LED video wall screens provide a lifelike background visual that alternates a real shoot location and saves time and travel costs of the entire crew. For instance, The Mandalorian TV series has extensively used semicircular LED video walls for the in-house shoot and the virtual production technology for overall production, eliminating the need for on-location shoots.
The rising popularity of web series containing visual effects and three-dimensional graphic environments are encouraging video-makers to implement virtual production technology in their video content. Popular web and television series such as Games of Thrones, The Last Kingdom, Black Mirror, and Outlander have extensively implemented visual graphics to create epic and historical scenes. VFX helps produce high-quality video content with realistic graphic characters and artificial scenes that enrich the viewing experience. Moreover, virtual production technology helps reduce video production costs by eliminating the need to shoot at expensive sites and bringing pre-visualization (a part pre-production process) on set. Pre-visualization creates a first three-dimensional representation of the final visual effects action sequence to help Movies-makers plan out camera placement and other creative/technical requirements.
With the advent of advanced technologies in virtual production, filmmakers can create more advanced computer graphic characters using facial-capture training data to transform visuals into real-time characters. The most recent example of advanced visual effects is the transformation of actor Josh Brolin’s face into the lead villain Thanos in the latest Marvel Avengers Movies. Furthermore, artificial intelligence and machine learning features are expected to further enhance the quality of visual effects and simplify the design process of a three-dimensional model. Furthermore, the growing applications of artificial intelligence in content creation for action simulation, three-dimensional texturing, and post-process motion-capturing data are expected to lead to the development of advanced visual effect software functions in the near future.
The software segment accounted for the largest market share of nearly 42% in 2019 and is expected to retain its dominance over the forecast period. The rising applications of visual effects and computer-generated graphics in movies and commercial advertisements are expected to positively influence market growth. Also, ongoing technological advancements in virtual production software solutions are allowing the development of engaging content through the incorporation of advanced VFX features. Further, the growing inclusion of machine learning and deep learning in virtual production solutions is expected to drive the development of software with more value-added features, fueling the growth of the segment.
The hardware segment is projected to expand at a significant pace and is expected to hold the second position in terms of market revenue over the forecast period. This can be attributed to the considerable rise in the number of LED video wall screens for real-time background visuals required for in-house shoots. The increasing use of virtual production technology in film studios and TV shows is expected to boost the demand for virtual production hardware such as motion capture workstations, virtual camera systems, and simulation cameras in the near future. The rising popularity of three-dimensional design and realistic virtual characters for movies and video games is expected to drive the demand for computer graphics cards.
The service segment is anticipated to emerge as the fastest-growing segment over the forecast period. Owing to the lack of trained professionals in VFX and virtual production technology, moviemakers or film studios often hire professional agencies for their services to implement VFX in their video productions. Moreover, services are mainly required during the production and post-production of any video content. The rising number of new videos on various broadcasting platforms is fostering the growth of the service segment. The segment is anticipated to register the highest CAGR of 17.8% during the forecast period.
The post-production segment dominated the market in 2019 and accounted for 52.9% of the market. This can be attributed to its crucial role in editing and collaborating post-shoot videos with graphics and visual effects (VFX). The segment is expected to witness promising growth opportunities over the forecast period as well, thanks to the constant rise in new video production projects on various video platforms globally. A rising number of video broadcasters across the internet is leading to promising growth prospects for the segment.
The production segment is anticipated to register a promising CAGR of 17.8% over the forecast years. The collaboration of high-quality visual graphics with a motion-captured imagery character in a three-dimensional environment has become highly popular in recent times. Performance capture through a virtual camera enables video-makers to portray an imagery character’s action by simulating a real actor’s movements. The scene can be simultaneously projected in a realistic graphics environment generated through the computer or a live LED wall. The collaboration of visual graphics and imagery characters through motion capture is gaining traction and is likely to positively influence the virtual production market in the near future.
The movies segment accounted for the largest market share of nearly 30.5% in 2019. A substantial increase in movie production budgets and the high usage of VFX in Hollywood and other regional movie studios are fueling the growth of the movie segment. The rising trend of shifting movies broadcast from cinema halls and multiplexes to over the top (OTT) platforms is allowing filmmakers to reach a larger audience which is expected to subsequently drive the growth of the segment over the forecast period.
The television segment is expected to register the fastest CAGR of 17.4% over the forecast period. This can be attributed to the increased penetration of television sets in developing regions. Moreover, the increased uptake of smart television sets with advanced technological features, such as integrated internet and interactive web, allows users to access the internet, view web pages and view photo slideshows on these devices. The television segment is anticipated to outshine the movies segment in terms of total market revenue and hold the largest market revenue by the end of the forecast year.
North America dominated the market in 2019 and accounted for nearly 38.5% of the market. This can be attributed to the high application of virtual production in major film studios in the region, including NBC Universal, Viacom CBS, Warner Media, and Walt Disney Studios. Moreover, substantial investments of companies in the region in R & D activities to develop advanced virtual production software solutions also support the development of the regional market. For Instance, in June 2020, Epic Games, Inc. upgraded its play station software, Unreal Engine 4.25, and introduced an advanced version of Unreal Engine 5. The Unreal Engine is a VFX software that can be used for pre-visualizing, designing, and editing visual effects in a real-time environment. Furthermore, the rising implementation of visual effects in commercial ads and sporting events are driving the growth of the regional market.
The Asia Pacific regional market is anticipated to gain significant traction in the global market and expand at a CAGR of 17.8% over the forecast year. The regional market is witnessing one of the highest implementing rates of virtual production technology in film studios; China, Australia, India, Japan, and South Korea are the key countries for driving the demand for virtual production solutions. The growing demand for online video streaming and the increasing popularity of on-demand video content across the region are also positively impacting the virtual production market. Moreover, filmmaking industries in the region are among the first to implement technologically advanced filmmaking solutions.
The competitive landscape of the market is fragmented and features the presence of several market players. The market has witnessed several mergers, acquisitions, and strategic partnerships in recent years. For instance, in November 2020, Epic Games Inc. acquired Quixel, a photogrammetry asset library company that makes three-dimensional models based on high definition photography. With the acquisition, Epic Games Inc. aims to provide access to Quixel’s existing library of models to Unreal Engine users. In March 2020, Epic Games Inc. acquired Cubic Motion, a provider of highly detailed digital facial animations for both films and video games. The acquisition would further enrich visuals and three-dimensional graphic environments for the users of Epic Games Inc. solutions. Some of the prominent players in the virtual production market are:
- Arashi Vision Inc. (Insta 360)
- Autodesk Inc.
- BORIS FX, INC
- Epic Games, Inc.
- HTC Corporation (VivePort)
- HumanEyes Technologies
- Mo-Sys Engineering Ltd.
- NVIDIA Corporation.
- Pixar (The Walt Disney Company)
- Side Effects Software Inc (SideFX)
- Vicon Motion Systems Ltd
This report provides forecasts for revenue growth at the global, regional, and country levels and an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For this study, Grand View Research has segmented the global virtual production market report based on component, type, end-user, and region.
- Component Outlook (Revenue, USD Million, 2016 – 2027)
- Type Outlook (Revenue, USD Million, 2016 – 2027)
- End-user Outlook (Revenue, USD Million, 2016 – 2027)
- TV Series
- Commercial Ads
- Online Videos
- Regional Outlook (Revenue, USD Million, 2016 – 2027)
- North America
- Asia Pacific
- South America
- Middle East and Africa (MEA)
- North America