3D Animation Market Analysis By Technique (3D Modeling, Motion Graphics, 3D Rendering, Visual Effects), By Component, By Deployment, By End-use, By Region, And Segment Forecasts, 2018 - 2025

Industry Insights

The global 3D animation market size was valued at USD 11.46 billion in 2016. The increasing adoption of visual effects by the media and entertainment industry; growing use of animation in media & entertainment, manufacturing, construction, and other end-use industries; and increasing competitiveness in the virtual reality, augmented reality, and artificial intelligence spaces, are expected to drive the market growth significantly.

The industry has been gaining prominence due to the adoption of this technology in various applications for improved and effective visual effects. Furthermore, government initiatives, such as incentives, subsidiaries, and tax reliefs, have been major growth propellants, especially in developing countries which portray an immense growth opportunity for the market.

The expanding gaming industry is perceived as a major growth driver for the market. The demand for video games is increasing among the teenage population, owing to technological advancements that help create high-definition graphics games. The growing demand for virtual reality in games acts as an impetus for attracting the youth, especially in the Asia Pacific region which is witnessing an increase in the number of millennials.

The Visual Effects (VFX) technique is anticipated to be a major contributor to the industry growth. VFX is carried out in the post-production stage using various technologies and multiple animations, graphics designs, and modeling tools. The VFX industry is rapidly growing due to its increasing applications in the film-making and gaming industry. The emergence of domestic as well as global Over-the-top (OTT) players facilitates multiple content choices to the users. The visual media consumption in digital platforms is increasing, where the consumers are shifting from content ownership to having access to digital libraries which can be accessed irrespective of the user’s time and location.

Technique Insights

Based on technique, the 3D animation market is segmented by 3D modeling, motion graphics, 3D rendering, and VFX. By 2025, 3D modeling is anticipated to account for around 30% of the overall revenue share, whereas the VFX segment is expected to grow at the highest CAGR of over 12.5% from 2017 to 2025. The new VFX trends are expected to dominate the media and entertainment industry including films, games, television, and commercials. In the film industry use of VFX has made shooting more economical and convenient than before, as it saves time and reduces the production costs, especially in cases of recreating war sequences, palaces, and an earlier era to give a realistic look to the movie.

The 3D rendering techniques have been evolving over a period from the non-realistic wireframe rendering to more advanced techniques including ray tracing, radiosity, and scanline rendering. The methods used in rendering technique differ based on its application either being real-time rendering or photo-realistic rendering. The real-time rendering is ideal for interactive media such as simulations, games, mapping, and medical applications, whereas the photo-realistic rendering is ideal for non-interactive media including feature videos and films. The real-time rendering has been enhanced by the fast computer processing power, which has enabled a higher degree of realism and a polygonal effect to the graphics.

The trend of outsourcing VFX from the developed countries to the cost-effective developing countries has been on the rise. However, to eliminate the adverse effects of outsourcing, the governments of developed countries such as UK and Canada are offering subsidies, grants, and tax reliefs to promote the growing usage of VFX in their country. For instance, Starz Animation Toronto, a Canadian studio received a grant worth USD 23.0 million out of a total investment of USD 153.0 million over a five-year period which was used to retain and create approximately 250 jobs. Such government initiatives have increased the adoption of VFX by the solution providing companies.

Component Insights

By component, the industry has been segmented by hardware, software, and services. In 2016, the software segment was valued at around USD 6.00 billion and is estimated to grow at a CAGR of more than 11.5% over the forecast period. Animation software is primarily used to generate images and give the illusion of movement when the images are shown as a sequence. The industry can be categorized by software into plug-in software, Software Development Kits (SDK), and packaged software solution.

The market is expected to exhibit robust growth with the development of animation-compatible computers and stereoscopic imaging software. Major animation studios are developing associated software and are also allowing innovators to contribute to their software solutions by a licensing agreement. For instance, Walt Disney Animation Studios develops its proprietary software such as Ptex for texture mapping, Bidirectional Reflectance Distribution Functions (BRDF) Explorer, and SeExpr used to enable artistic control and customization over the core software.

The hardware segment is constituted of workstations, video cards & GPU, and motion capturing (Mocap) systems. A discrete video card is more effective than an integrated one with comparatively less power. The workstations are costly, but on the other hand, enable effective animation with minimal power consumption than the externally attached hardware system.

Deployment Insights

Based on deployment, the 3D animation market has been segmented on the basis of on-premise and on-demand. On-premise deployment dominated the market in 2016. However, on-demand deployment is expected to witness substantial growth over the forecast period, which can be attributed to the increasing adoption of cloud-based animation software solution.

Conventionally, the animation software is installed on the premises of the animator. However, the use of 3D modeling technique on a regular basis requires maintenance, contracts, and licensing agreements. As a result, the on-premise model is expensive than the cloud-based on-demand software solution which requires minimum maintenance, offers a usage-based payment model, and is accessible to the users irrespective of the time of the day.

End-Use Insights

By end-use the 3D animation market has been segmented by media & entertainment, architecture & construction, education & academics, manufacturing, healthcare & life sciences, and government & defense. The media & entertainment sector dominated the market in 2016 and is expected to account for a revenue share of approximately 35% by 2025. This is primarily attributed to the increased adoption of motion graphics and visual effects in the sector. Gaming, advertisement, and film-making are the most prominent sectors in the media & entertainment industry, which are pushing the demand for physics-based animation that uses the fundamentals of physics to manifest a higher degree of realism in the animated content.

The manufacturing sector is expected to account for an estimated CAGR of over 11.5% from 2017 to 2025. The sector is projected to witness the highest growth in the Asia Pacific region with countries such as Japan, China, Australia, and India being the most dominant markets. The revenue share of the education and academics sector is expected to increase over the forecast period owing to the increased use of animation for conceptual learning and medical education and training purpose. For instance, it is easier to train medical students by using animated content than photography, sketch, and 2D illustrations.

Regional Insights

The North American region dominated the industry with a revenue share of close to 40% in 2016 and is expected to continue its dominance over the forecast period. The U.S. accounts for the highest revenue share owing to the huge adoption of 3D imaging technologies including 3D animation and 3D printers. The major industry players are based in the U.S., UK, and Japan.

The Asia Pacific region is projected to witness the highest growth over the forecast period. Increasing adoption of visual effects, especially in the gaming industry coupled with the availability of experienced and cost-effective labor are expected to play a major role in driving the industry demand in the region. India, China, and Singapore are among the prominent countries in the region with expertise and skill-set and at the same time offer a low cost of production to the animators.

Competitive Insights

Key players in the market include Autodesk, Inc., Adobe Systems Incorporated, NVIDIA Corporation, Corel Corporation, and The Foundry VisionMongers Ltd. A large number of players have adopted Mergers & Acquisitions (M&A) to tackle the challenges of in-house research & development and to benefit from the cost-effective and experienced skilled labor. For instance, in April 2016, Autodesk, Inc. acquired Solid Angle S.L., which is a supplier of mobile phones, tablets, and 4G smartphones. The acquisition has helped Autodesk, Inc. to improve and render workflows within Autodesk, Inc.’s products and develop new rendering solutions.

Similarly, in June 2015, Adobe Systems Incorporated acquired Mixamo which is a provider of 3D computer graphics software based in San Francisco. Through this acquisition, Adobe Systems Incorporated integrated Mixamo’s technology to its creative cloud.

Report Scope

Segments Covered in the Report

This report forecasts revenue growths at global, regional, and country levels and provides an analysis of the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global 3D animation market based on technique, component, deployment, end-use, and region.

• Technique Outlook (Revenue, USD Million; 2014 - 2025)

  • 3D Modeling

  • Motion Graphics

  • 3D Rendering

  • Visual Effects

• Component Outlook (Revenue, USD Million; 2014 - 2025)

  • Hardware

  • Software

  • Service

• Deployment Outlook (Revenue, USD Million; 2014 - 2025)

  • On-premise

  • On-demand

• End-Use Outlook (Revenue, USD Million; 2014 - 2025)

  • Media & Entertainment

  • Architecture & Construction

  • Education & Academics

  • Manufacturing

  • Healthcare & Life sciences

  • Government & Defense

  • Others

• Regional Outlook (Revenue, USD Million; 2014 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

  • Asia Pacific

    • Australia

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa