Today’s VFX industry grew up in the 1990s, when photo-real computer generated imagery began to enhance and then replace the non-digital techniques that preceded it. Here’s a roundup of industry dynamics that have had a lasting impact over the 30 years since then.

Barriers to Entry Fall (late 1990s)

Desktop computers and off-the-shelf computer graphics software started competing with the expensive workstations and proprietary tools within the first 10 years of the modern VFX industry. By the late 90s, you could buy one artist seat with the computer hardware and software to create sophisticated digital VFX for under $10,000, and the cost hasn’t changed all that much since then. While never-before-seen VFX and huge volumes of work remained with established players, garage shops were able to get smaller volumes of less complex work on the screen with minimal upfront investment. Clients began to have more choices as to who, and where, their VFX work would be done.

Tax Incentives Lure VFX Work Away from Hollywood (late 1990s)

Tax incentives successfully lured live action production and then VFX work away from Hollywood’s heartland in California. Vancouver and the United Kingdom led the way as hubs for feature film VFX work, cultivating VFX talent pools to meet client demands for work to be performed in tax advantaged geographies. Tax incentives in specific locations became more or less attractive, forcing VFX workers to migrate with the jobs. 

VFX Goes Global (late 1990s)

Increased competition on price among the handful of major players in the space soon led to the offshoring and then outsourcing of VFX work. This was initially limited to low complexity work, which would have become even more commoditized without the nuances of integrating it with more complex work. Companies that invested in training artists in India and ambitious VFX studios worldwide raised the bar on what could be sent overseas

Schools and Factories (early 2000s)

‍As the technology began to mature, Hollywood’s visual ambition drove an explosion in the volume of computer-generated VFX in movies. To pick just one example, the original Jurassic Park (1993) had less than 60 shots with computer generated imagery; Jurassic World (2015) had over 2,000. The capability of VFX studios had been judged largely based on the quality and sophistication of the work they could produce; now, the scale of work they could be trusted to deliver became a factor. VFX studios became creative factories. Schools begin to offer vocational courses in VFX.

Vendors Outlast In-House Teams (early 2000s)

Major motion picture studios experimented with bringing VFX in-house. While the relatively longer projects and predictability of feature animation work allowed in-house computer animation division to persist, VFX proved to be a tougher proposition, as the major studios struggled to make VFX divisions profitable with themselves as their clients. With the exception of Sony Pictures Imageworks, internal VFX groups haven’t scaled. 

M&A Enters the Scene (2004)

Thomson (later to rebrand as Technicolor) acquired pioneering VFX firm MPC in 2004. Since then, spikes of M&A activity have altered the landscape of the VFX industry. Several groups acquired a portfolio of VFX brands, increasing not just their geographic reach and client roster but also the range of price points they can efficiently service.

Schedules Shrink (2006)

The demand for VFX work at factory scale took a new turn in 2006, when Disney asked ILM to deliver 750 of the most difficult visual effects shots in Pirates of the Caribbean Part III in a matter of months to meet an ambitious release date for the movie, redefining what major studio clients understood to be possible in terms of schedule for tentpole VFX. 

Silicon Valley Dollars Arrive (2013)

Tech firms Netflix, Amazon and latecomer Apple launched a content arms race to win subscribers for the OTT streaming services, forcing Disney and Warner Bros/HBO to follow suit. Growth in spend on content led to both increased volume of VFX work, but also the advent of shows Game of Thrones and Lost in Space that demanded feature film quality VFX for the small screen. Large VFX firms with cumbersome pipelines and high overhead were forced to become more nimble if they wanted to do well on these hybrid projects. VFX providers for traditional broadcast TV found themselves having to raise the quality bar for a share of the pie.

Brands Come Calling (2014)

Tech-savvy brands relying heavily on social media advertising found themselves less reliant on traditional advertising agencies, and their internal creative teams brought increasing amounts of direct-to-brand work to VFX and design firms. Post Production and VFX services firms might find themselves working on branded content for an advertising agency in one suite and a project commissioned directly by the agencies’s client in the suite next. 

Realtime Graphics Bears Fruit (2019) 

VFX companies had been experimenting with video game engines for well over a decade when incremental advances in real-time graphics technology led to a surge in virtual production. Non-real time VFX rendered in post production continues to push the envelope of image quality, while allowing filmmakers to make significant changes to their film throughout post.

Demand for VFX Reaches an All-Time High (2021)

Film and TV VFX firms pivoted to remote work to complete longer projects in progress at the start of the COVID pandemic, while smaller VFX studios found themselves vulnerable to the impact of production shutdowns. As projects delayed by the pandemic  resumed on top of planned post-pandemic content, unprecedented demand for VFX services resulted in shortage of capacity and talent, with highly desirable VFX projects struggling to place their work. Studio clients became more amendable to block booking  and multi-year commitments to VFX vendors, promising longer-term visibility for VFX studios that had been elusive in the past.

Dual Strikes in Hollywood Bring the Industry to a Standstill (2023)

A series of labor disputes pitted the Writers Guild of America (WGA) and Screen Actors Guild (SAG-AFTRA) against the major Hollywood studios in their latest contract negotiations. The WGA strike lasted 148 days and SAG-AFTRA strike for 118 days, bringing Hollywood film production to a standstill for 6 months. In post-production, impact on the VFX industry lagged behind by several months, with work expected to return to previous levels in mid-2024.