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The virtual production market is estimated to grow by USD 2.44 billion at a Compound annual growth rate (CAGR) of 17% between 2022 and 2027. The virtual production market experiences growth propelled by key factors such as increased integration in gaming, successful films and TV shows leveraging animation, and the expanding use of LED video wall technology. These elements contribute to the market's expansion, demonstrating the diverse applications and growing demand for virtual production solutions across entertainment sectors.
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This market growth analysis report extensively covers market segmentation by component (software, services, and hardware), type (post-production, production, and pre-production), and geography (North America, APAC, Europe, Middle East and Africa, and South America).
The market share growth by the software segment will be significant during the forecast period. The software segment of the market is growing globally owing to the increasing addition of deep learning and machine learning in virtual production resolution. The rising usage of VFX and computer-generated graphics in cinema and business commercials is expected to positively affect the demand for the software segment of the global virtual production market during the forecast period.
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The software segment was valued at USD 409.29 million in 2017 and continued to grow until 2021. Constant technical progression in virtual production software solutions also permits the development of engaging content through the integration of sophisticated visual effect features. Virtual production software enables filmmakers to adjust content during filming rather than in virtual production. The usage of virtual production software also reduces the overall production cost of the filmmakers. Virtual production software enables filmmakers to customize their sets fully and even create environments that do not exist in their imagination. Owing to these factors, the demand for this market segment is estimated to grow during the forecast period.
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North America is projected to contribute a 45% share in 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
North America emerged as the dominant region in the market. This is because of the increased application of virtual production in leading film studios in North America. Moreover, heavy investments by companies in research and development activities to create upgraded virtual production software solutions have been encouraging the development of the regional market. A considerable increase in movie production budgets and the rising usage of virtual effects in Hollywood are also driving the growth of the movie segment in North America. Additionally, the transition of broadcasting movies from multiplexes and cinema halls to OTT platforms has been supporting filmmakers in the region since 2020 to reach a large audience, which is anticipated to boost market growth in North America during the forecast period.
The market experiences rapid growth, driven by advancements in technology and creative vision. From renowned TV shows like Games of Thrones to blockbuster movies like Marvel Avengers, filmmakers utilize virtual production solutions to create realistic virtual characters and immersive three-dimensional graphics. Incorporating real-time rendering and motion-captured movements, virtual backdrops enhance storytelling, reducing video production costs and eliminating the need for expensive shoot locations. Innovations like HTC VIVE and AI-powered cameras further propel the market forward, fostering strategic acquisitions and specialized hardware development. With a compound annual growth rate (CAGR) on the rise, the virtual production market continues to expand, offering filmmakers unparalleled tools to bring their visions to life.
The growing implementation of virtual production in the gaming industry is notably driving the growth, although factors such as the limitations in the availability of content may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The market growth is significantly propelled by the increasing integration of virtual production within the gaming industry. Gaming stands as a prominent domain for virtual production technology applications, requiring adept skills in 3D design, animation, and software programming, coupled with creativity and innovation. With the potential boom in mobile gaming, advancements in smartphone processors, graphics, motion tracking, and battery life are poised to augment virtual production games. Furthermore, virtual production finds diverse applications in storytelling, art, communication, social interaction, awareness campaigns, and live entertainment. These broad application areas, coupled with ongoing technological enhancements, are poised to fuel market expansion throughout the forecast period.
The increasing popularity of virtual reality (VR) and 360-degree video content is the primary trend in the market. 360-degree videos are clips used for displaying a spherical scenario where the camera has recorded all possible angles of the environment. These videos are emerging as a trend in the visual content market. Many filmmakers, online content developers, and commercial video producers use 360-degree videos to promote their products or services. Companies also provide high-resolution gigapixel content for key events and venues. Owing to the popularity of 360-degree videos, many marketers use 3D technology to produce advertisements. For instance, Nescafe, a part of the Nestle Group (Nestle), is one of the first companies that adopted this technology.
Virtual reality and 360-degree video content are the latest advances in digital content after 3D, four-dimensional (4D), and five-dimensional (5D) technologies. VR is the newest trend in the digital entertainment sphere and is being widely deployed in various applications and digital arenas. The rising popularity of 360-degree video clips is another factor driving the market's growth. Such an increase in HD and 360-degree content requires virtual production services such as VFX, editing, sound mixing, and screening. Therefore, the increasing popularity of VR and 360-degree video content is expected to gain prominence in the market during the forecast period.
The limitations in the availability of content are the primary challenge impeding the market growth. Content is both an asset and a challenge for film and online content providers. They need to ensure that their content portfolio is attractive to consumers. Acquiring rights to distribute content on a new platform is also a challenge for video content players. These players need to thoroughly understand their target market, considering the rules and regulations of the country to which the content is delivered. Content owners must also maintain balanced relationships with theatrical exhibitors and broadcasters so that they do not enter into litigation in terms of content rights. This factor directly affects the growth of the market.
The amount of data space required to meet consumer demand is much larger than the data space currently available. Therefore, content providers must be selective in delivering their content. The service providers are also bound by limitations of the bandwidth available to them for delivering online content. Therefore, they are continuously seeking solutions to optimize bandwidth. Scalability increases the storage cost for providers. Content must be classified according to demand and popularity so that savings can be made on its transfer cost across servers. Thus, the limitation in the availability of content is estimated to hinder the growth of content creation, which would directly impact virtual production facilities and services during the forecast period.
The market research and growth report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Adobe Inc. - The company's key offerings include virtual products such as Adobe Photoshop, Illustrator InDesign, and Lightroom.
The market research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of Companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize Companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize Companies as dominant, leading, strong, tentative, and weak.
The market is undergoing significant advancements, driven by the demand for realistic virtual characters and immersive three-dimensional graphics. Developments in virtual production techniques enable the creation of real-time virtual interactive background environments, seamlessly blending motion-captured movements with live-action footage. LED video wall screens, such as those used in The Mandalorian TV series, offer dynamic virtual set extension elements, revolutionizing shoot locations. Semicircular LED video walls provide dimensions to three-dimensional graphic environments, enhancing the camera's movement and visual effects. From web series to blockbuster franchises like Marvel Avengers, virtual production reduces video production costs by eliminating the need for expensive sites and streamlining pre-visualization. With innovations like HTC VIVE and VIVE Mars CamTrack, coupled with AI-powered cameras and advanced LED walls, the market witnesses strategic acquisitions and specialized hardware development to meet the demands of movies, television, online videos, and live events, emphasizing safety regulations and ethical considerations in virtual filmmaking.
The market forecasting report covers market growth by revenue at global, regional, & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Market Scope |
|
Report Coverage |
Details |
Page number |
157 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 17% |
Market growth 2023-2027 |
USD 2.44 billion |
Market structure |
Fragmented |
YoY growth (%) |
15.8 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 45% |
Key countries |
US, Canada, China, France, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
360Rize, Adobe Inc., Arashi Vision Co. Ltd., Autodesk Inc., BORIS FX Inc., Brompton Technology Ltd., Deloitte Touche Tohmatsu Ltd., Epic Games Inc., HTC Corp., Humaneyes Technologies Ltd., Mo Sys Engineering Ltd., NVIDIA Corp., Panocam3d.com, ROE Visual Co. Ltd., Side Effects Software Inc., Technicolor SA, The Walt Disney Co., Unity Software Inc., Vicon Motion Systems Ltd., and Weta Digital Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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