1. Blog
  2. News
  3. India’s Animation, VFX, and Gaming Markets Set to Hit $6.8 Bn by 2026, Creating 2 Mn Jobs

India’s Animation, VFX, and Gaming Markets Set to Hit $6.8 Bn by 2026, Creating 2 Mn Jobs

India’s Animation, VFX, and Gaming Markets Set to Hit $6.8 Bn by 2026, Creating 2 Mn Jobs
4
(1)

The animation, visual effects (VFX), and online gaming sectors in India are poised for significant growth in the coming years, according to a new report by EY. The report “Media & Entertainment: A Vibrant Ecosystem” forecasts that the animation and VFX market will reach $2.2 billion by 2026, growing at a compound annual growth rate (CAGR) of 22.8%. 

The animation and VFX sector is projected to grow from $1.3 billion in 2023 to $2.2 billion by 2026, increasing its share of the media and entertainment industry from 5% to 6%. The online gaming market is expected to reach $4.6 billion by 2026, growing at a CAGR of 39.1%.

The sector is projected to generate over 160,000 jobs annually, with an anticipated total of 2 million new jobs by 2030. Technological advancements such as artificial intelligence (AI), machine learning (ML), and 5G are boosting efficiency and opening up new creative opportunities. Additionally, government support through strategic investments in talent development and infrastructure fosters growth.

image 18
Source: Mint

Online gaming market, currently valued at $2.62 billion, is expected to expand to $4.6 billion by 2026, raising its share of the M&E sector from 10% to 13%, according to the report. 

AD 4nXc6FtCF5vLtM4J vYALh6EYykqpQuaeubkBBfE1QdPeIuxW9 JK5GytUOqKMBHX7 DHzirr KLh6qfEBvJ42gO4JDKs9qvbqJ2u5m9llnN YEYTAwC7IJtzY4OTWMAgrD2YZ6hFSZUlOBh6PyfIV1YhliTa?key=JeRDPsC8aFDURaEFiZnuaA
Source: Mint

The global animation, VFX, and game market was valued at $442.96 billion in 2021 and is projected to reach $593.96 billion by 2031, reflecting a compound annual growth rate (CAGR) of 3% during the forecast period. The gaming market is expected to grow due to the increasing adoption of advanced visual effects technology. The rise of 3D technology has led to the creation of high-definition content with more pixels and improved quality. 

AD 4nXdfUgECHxhVuY7Wj2J01Gy9mf4v 4yF03bKNyb93IIYknUU10trUzpMaPI 5AVzW6 MFlylZKWYwN2KSh5lz2NWg6LT
Source: businessresearchinsights.com

The demand for 3D animation software is increasing across various sectors, including medical, gaming, entertainment, and research. This technology is also anticipated to enhance video marketing efforts significantly. Integrating virtual reality technologies in visual effects will drive interest in new and advanced tools. Additionally, the growing use of 3D mobile applications will likely boost market growth. 

Animation, VFX & Gaming Market Segmentation

By Type
The market is categorized into Animation and VFX and Game and VFX. Animation and
VFX is anticipated to be the dominant segment.

By Application
The market is segmented by application into anime, film, and video games.

AD 4nXfMoQJdJEn4TDQzuY9BXTIL2qouGNxZk3tpGy7Xbx nHgQnkRESjGPDxkMhf a1oF8rbnN7fsBtOV5amROK6TxS4AOXeD4FqJN6gUsU KDTiYicM3ygCmb NfqU QoWp8muojgkpLASimW0hmqtLlvkxd F?key=JeRDPsC8aFDURaEFiZnuaA
Source: businessresearchinsights.com

Driving Factors Behind Growth of Animation & VFX Sector

As far as India is concerned, the animation and VFX industry is one of the fastest-growing segments of the media and entertainment sector. The industry is driven by several factors, including:

  • Large and young population: India has a large and young population that is increasingly consuming digital content. This provides a large market for animation and VFX services. 
  • Government support: The government is taking steps to promote the growth of the animation and VFX industry, such as providing tax incentives and setting up special zones for these industries.
  • World Class Studios: India’s animation and VFX industry is already a significant player in the global market. Indian studios have worked on high-profile international projects, including “The Lion King” and “Avengers: Endgame.” The online gaming industry in India is also growing rapidly, with several successful domestic and international titles being developed and published in the country.
  • Cost competitiveness: Indian studios can offer competitive rates for animation and VFX services.
  • Skilled workforce: India has many skilled animators and VFX artists.

Animation and VFX

The animation and VFX industry in India is used for a variety of purposes, including:

  • Feature films: Indian studios have worked on several high-profile international feature films, such as “The Lion King” and “Avengers: Endgame.”
  • Television shows: Indian studios produce many animated and VFX-heavy television shows.
  • Advertising: Indian studios create animated and VFX-based advertisements for various clients.
  • Gaming: Indian studios develop and produce animated and VFX-based games.

Reasons Behind Growth of Online Gaming Sector

The online gaming industry in India is another rapidly growing segment of the media and entertainment sector. The industry is driven by several factors, including:

  • Large and young population: India has a large and young population that is increasingly consuming digital content. This provides a large market for online games.
  • Increasing Internet penetration: The number of people with Internet access in India is growing rapidly, making it easier for people to play online games.
  • Government support: The government is taking steps to promote the growth of the online gaming industry, such as providing tax incentives and setting up special zones for this industry.
  • Rising disposable incomes: Indians’ disposable incomes are rising, leading to increased spending on entertainment, including online games.

The online gaming industry in India is used for a variety of purposes, including:

  • Casual games: Casual games are the most popular type of online game in India. They are typically simple to play and can be played in short bursts.
  • Mobile games: Mobile games are another popular type of online game in India. They can be played on smartphones and tablets.
  • eSports: eSports is a growing segment of the online gaming industry in India. It is a competitive form of gaming often watched by large audiences.

Outlook

In 2019, India’s AVGC (animation, visual effects, gaming, comics, and extended reality) sector was valued at $2.3 billion, about 0.7% of the global market. It’s projected to grow 2.2 times in the next four years, reaching roughly 1.5% of the worldwide market. Fueled by rising demand for quality content in entertainment and gaming, India is poised to revolutionize content creation and gain international recognition.

Overall, the outlook for India’s animation, VFX, and online gaming sectors is very positive. These sectors are poised for significant growth in the coming years, driven by many factors, including a large and young population, increasing internet penetration, and government support.

FAQs

  1. What drives the growth of India’s animation, VFX, and gaming market?

    Due to several key factors, India’s animation, VFX, and gaming market is experiencing rapid growth. The increasing internet penetration has increased the demand for digital content as more people come online. Additionally, India’s young and expansive population represents a significant consumer base for entertainment. Government support has been crucial, with various initiatives and policies to foster sector growth. Furthermore, the country boasts a growing talent pool of skilled animation, VFX, and gaming professionals, further driving the industry’s expansion.

  2. How will the growth of these sectors impact job creation in India?

    The growth of the animation, VFX, and gaming sectors is expected to create many jobs in India. According to estimates, these sectors could create over 2 million jobs by 2030. This will provide employment opportunities for many professionals, including artists, animators, game developers, and technicians.

  3. What are the challenges facing the growth of these sectors in India?

    Despite the promising outlook for India’s animation, VFX, and gaming market, several challenges must be addressed. One significant issue is the lack of adequate infrastructure in some regions, including studios and equipment, which could hinder sector growth. Additionally, India faces competition from established global players, necessitating efforts to maintain its market position. Another challenge is attracting and retaining top talent, as international competition makes it difficult to keep skilled professionals within the country.

  4. What are the opportunities for growth in these sectors?

    Despite the challenges, India’s animation, VFX, and gaming market presents numerous growth opportunities. The expanding Indian middle class provides a significant domestic market for entertainment content. Additionally, Indian studios can capitalize on their talent and cost advantages to export content to international markets. Emerging technologies, such as virtual and augmented reality, offer exciting prospects for sector expansion.

How useful was this post?

Click on a star to rate it!

Average rating 4 / 5. Vote count: 1

No votes so far! Be the first to rate this post.

c732900095edf69e76e98850a959ebe3?s=150&d=mp&r=g
+ posts

I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.

Announcing Stock of the Month!

Grab this opportunity now!

Gandhar Oil Refinery (India) Ltd. IPO – Subscription Status,

Allotment & Other Key Dates

Registered Users

10 lac+

Google Rating

4.6

Related Articles

What’s trending

Read our latest blogs

Who we are

SEBI registered investment advisory services

Media, Award & Accolades

Stay updated with our winning journey

Video Gallery

Watch our exclusively curated financial videos

Performance

Know the journey of stocks

Newsletters

Stay on top of the stock market

Contact us

Stay in touch

5 in 5 Strategy

A portfolio of 20-25 potential high-return stocks

MPO

1 high-growth stock recommendation/ month, that is trading below its intrinsic value

Combo

A combined solution of 5-in-5 wealth creation strategy & mispriced opportunities

Dhanwaan

Manage your portfolio with dhanwaan

Informed InvestoRR

A step by step guide to sharpen your investing skills

EPW Coming soon

A concentrated portfolio of 12-18 high-growth & emerging theme stocks

Pricing

Choose from our range of pricing packages