Virtual Production Market Size, Share & Trends Analysis Report By Component (Hardware, Software, Services), By Type, By End-user, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global virtual production market size was valued at USD 1.82 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 18.2% from 2023 to 2030. 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. During the pandemic in 2020, prominent Hollywood filmmakers, including NBC, MTV, and ABC, began adopting Virtual Production using cloudbusting, which involved using a robotic camera like the Solo Cinebot, to shoot the actors remotely.

The increased adoption of 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. The LED video wall technology has substituted a green screen, making film production more accessible after the break of COVID-19. For instance, in April 2020, ABC's show SkyLine filmed all their real-life scenes in a 360-degree camera and displayed them on the LED screen instead of the green screen.

LED video wall screens create a realistic background visual that replaces an actual shoot location while saving the entire crew time and money. For instance, The Mandalorian TV series has extensively used semicircular LED video walls for the in-house shoot and virtual production technology for overall production, eliminating the need for on-location shoots. Disney used LED walls of dimensions 20 feet high, 75 feet wide, and 270 degrees, which made it possible to present the movement of the 3D image concerning the camera's movement.

The rising popularity of web series containing visual effects and three-dimensional graphic environments encourages 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 of the pre-production process) on set. Pre-visualization creates a first three-dimensional representation of the final visual effects action sequence to help movie-makers plan out camera placement and other creative/technical requirements.

For instance, in April 2022, HTC VIVE, a computers and electronics manufacturing company, released a virtual production technology named VIVE Mars CamTrack. It accelerates, simplifies, and lowers the cost of virtual production software by combining the complete camera tracking workflow into a small plug-and-play module with professional-grade functionality. In many cases, the use of VIVE Mars Cam Track eliminates the need to shoot on-location and allows filmmakers to fully express their creative vision by allowing performers to instantly jump into any number of virtual backdrops as a scene is being shot.

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 movie series.

Furthermore, artificial intelligence and machine learning features are expected to enhance the quality of visual effects further and simplify the design process of a three-dimensional model. 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.

Component Insight

The software segment accounted for the largest market share of 41.8% in 2022 and is expected to retain its dominance over the forecast period. The rising visual effects applications and computer-generated graphics in movies and commercial advertisements are expected to influence market growth positively. The increase in the implementation of virtual production and the expansion of various products in the gaming industry will also positively impact market growth.

Also, ongoing technological advancements in virtual production software solutions allow the development of engaging content by incorporating 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 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 designs and realistic virtual characters for movies and video games is expected to drive the demand for computer graphics cards. For instance, in January 2022, Sony Corporation added a crystal LED to enhance its video production. Sony Innovation Studios redefined settings for film and television productions with its most recent technology that generates 3D volumetric point cloud data in Japan.

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 20.1% during the forecast period.

End-user Insights

The movies segment accounted for the largest revenue share of 29.0% in 2022. A substantial increase in movie production budgets and the high usage of VFX in Hollywood and other regional movie studios fuel the growth of this segment. The rising trend of shifting movie broadcasts from cinema halls and multiplexes to over-the-top (OTT) platforms allows filmmakers to reach a larger audience, which is expected to drive the growth of the segment over the forecast period.  

The television segment is expected to register the fastest CAGR of 19.7% 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, watch videos, 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 period.

Type Insights

The post-production segment accounted for the largest revenue share of 51.2% in 2022. 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, thanks to the constant rise in new video production projects on various video platforms globally, and filmmakers adapting virtual production methods due to the limitations caused by the COVID-19 outbreak.

For instance, in 2021, The TODAY Show segment that premiered during the Super Bowl Weekend was filmed in just a week using virtual production. The 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 20.1% 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. It replaces the concept of a green screen and goes physically to film different scenes. Performance capture through a virtual camera enables video-makers to portray an imaginary 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 in the background. The collaboration of visual graphics and imagery characters through motion capture is gaining traction and is likely to influence the virtual production market in the near future positively. For instance, in May 2022, Technicolor, a France-based entertainment provider, partnered with Paramount Pictures, a U.S.-based entertainment provider, and director Jeff Fowler, an American filmmaker, to create a fully computer-generated Sonic (a cartoon character) for Sonic the Hedgehog 2, a film based on the video game series by SEGA.

Regional Insights

North America dominated the market in 2022 and accounted for a revenue share of nearly 37.0%. This can be attributed to the extensive 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 PlayStation software, Unreal Engine 4.25, and introduced an advanced version of Unreal Engine 5. Unreal Engine is a VFX software used for pre-visualizing, designing, and visual editing effects in a real-time environment. Furthermore, the rising implementation of visual effects in commercial ads and sporting events is driving the growth of the regional market.

Asia Pacific is anticipated to gain significant traction in the global market and expand at a CAGR of 20.1% over the forecast years. The regional market is witnessing one of the highest virtual production technology implementation rates in film studios. China, Australia, India, Japan, and South Korea are the key countries driving the demand for virtual production solutions. For instance, in May 2022, Mo-Sys Engineering Ltd., a media production company based in London, partnered with GMS International, a software development company based in the U.S., to make virtual production and augmented reality available to South Korean broadcasters and cinematographers.

The agreement is anticipated to help Korea's vibrant media sector, which was one of the early adopters of the technology, satisfy the expanding need for virtual production. The growing demand for online video streaming and the increasing popularity of on-demand video content across the region positively impact the virtual production industry. Moreover, filmmaking industries in the region are among the first to implement technologically advanced filmmaking solutions.

Key Companies & Market Share Insights

The market's competitive landscape is fragmented and features the presence of several market players. In recent years, the market has witnessed several mergers, acquisitions, and strategic partnerships. 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 Quixel’s existing library of models to Unreal Engine users. In March 2020, Epic Games Inc. acquired Cubic Motion, a highly detailed digital facial animation provider 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 prominent players in the global virtual production market include:

• 360Rize

• Adobe

• Arashi Vision Inc. (Insta 360)

• Autodesk Inc.

• BORIS FX, INC

• Epic Games, Inc.

• HTC Corporation (VivePort)

• HumanEyes Technologies

• Mo-Sys Engineering Ltd.

• NVIDIA Corporation.

• Panocam3d.com

• Pixar (The Walt Disney Company)

• Side Effects Software Inc (SideFX)

• Technicolor

• Vicon Motion Systems Ltd

Virtual Production Market Report Scope

Global Virtual Production Market Segmentation

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 2017 to 2030. 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, 2017 - 2030)

  • Hardware

  • Software

  • Services

• Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Pre-production

  • Production

  • Post-production

• End-user Outlook (Revenue, USD Million, 2017 - 2030)

  • Movies

  • TV Series

  • Commercial Ads

  • Online Videos

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • Japan

    • India

  • South America

    • Brazil

  • Middle East and Africa (MEA)