ResearchAndMarkets launched a report of ‘European Animation, VFX & Games Industry: Strategies, Trends & Opportunities, 2019’ recently. The report states that the total value of the European animation industry was $45.6 billion in 2018 and is projected to reach $46.2 billion by 2020. The size of European video gaming industry was $19 billion in 2018 and is projected to reach 21.5 billion by 2020. The spend on special effects as a per cent of production cost is about 20-25 per cent. The traditional form of content viewership is giving way to a sharp increase in streaming video consumption.
Overview
The demand for animation, VFX and gaming has expanded with the increase in targeted broadcasting hours by cable and satellite TV, availability of low-cost internet access, penetration of mobile devices along with the growing popularity of streaming video. In addition, the demand for Animation and VFX content to power immersive experiences such as AR and VR is growing exponentially. The rapid advancement of technology has made animation, VFX & games available to the masses, and this industry has become one of the fastest growing segments in the global media and entertainment market. We are increasingly seeing more of the global animation, VFX and games production taking place in a globally distributed mode. Production work is becoming global with tax incentives, regional low labour costs and lower computing costs, which put pressure on companies to reduce costs and set up facilities in tax-advantaged or low-cost regions. This is a model which is increasingly being tapped by content producers.
The European animation studios have started partnering with global players to produce animation content for Television. These alliances have resulted in content suited for the local population. This is particularly seen in countries such as France, UK, Germany and Spain. The European animated feature film industry has still not achieved the popularity and global appeal of their American counterparts. International marketing is a key area for improvement for European animation studios. There are very few European films with trans-national success. This is partly due to the diverse cultural backgrounds. However, this is undergoing change with a small number of local European productions enjoying European and global success.
Market Size
The total value of the European animation industry was $45.6 billion in 2018 and is projected to reach $46.2 billion by 2020. The size of the European video gaming industry was $19 billion in 2018 and is projected to reach 21.5 billion by 2020. The total value of the global animation industry was $259 billion in 2018 and is projected to reach $270 billion by 2020. The spend on special effects as a per cent of production cost is about 20-25 per cent. The traditional form of content viewership is giving way to a sharp increase in streaming video consumption.
Strategies, Opportunities, Growth factors
Global consumers are displaying a growing appetite for engaging, high-definition visual experiences. Moviegoers are demanding high-quality productions with engaging visual effects and realistic animation and studios are including more animation and VFX shots into films. Consumers are consuming more immersive content across channels such as ultra-high-definition TVs, tablets and smartphones to head-mounted devices.
Animation, VFX and games content is being consumed not only on Netflix, Amazon, Hulu and Twitch but also on YouTube, Twitter and Facebook. With growing internet penetration and access to multimedia devices, customers are spending more time on streaming digital content. Streaming video is the fastest growing segment distribution channel for animation and is witnessing double-digit growth and the same is expected to continue for the next few years. This growth is attributed to the exponential growth in the number of online video viewers throughout the world. Cloud computing is playing a key role in character rendering and modelling processes as the cloud-based rendering of animation films are more effective and efficient as it reduces the time and cost compared to traditional rendering.
Cloud Gaming services which are growing at an exponential pace would need the right pricing model to both drive adoption and generate sufficient returns for platforms and publishers. The availability of low-cost micro-payment systems is allowing users to pay for access or download small quantities of digital content and is the key for online games market to grow. Artificial Intelligence and Machine Learning based techniques are being used for in-game analytics, customer acquisition, retention, cross-sell, churn, classify player behaviour etc.
Popular eSports tournaments have rich spectator interactions and immersive fan experiences for in-person and online viewers. Micro-segmentation of fans is emerging as eSports leagues and the tournament is consolidating various genres, platforms and viewing experiences by careful customer segmentation, targeting and positioning. China has become a leader in eSports and several tournaments are organized throughout the year with millions participating in both online and offline modes.