Is Virtual Production the Next Tech Bubble?

Isaiah Smith
Technical Director & Lead Unreal Engine Supervisor
Josh Goossen
Visual Content Lead

Virtual production techniques have been the talk of the town for everyone interested in filmmaking, 3D rendering, or interactive digital media. The research and application within these fields has rapidly improved over the last few years reflecting user interest, unique applications, and multiple huge industries working more closely together than ever before.

While we see a lot of potential here, enough that we’ve committed ourselves to working within and evangelising the benefits of these hybrid workflows, there’s definitely a pause for concern.

The excitement surrounding this seemingly revolutionary technology has translated to steep costs, an over abundance of studios, and a guarantee of flexibility that it may not be able to meet.

This has many concerned that in our excitement we’ve simulated a creative tech bubble that is primed to burst.

Now, normally when we talk about tech and stock market bubbles we think of things like the dot-com bubble, which was infamous for being a new commercial technology receiving incredible traction and reception, resulting in massive investment and growth, while ultimately becoming a money pit forcing the closures of many ventures and reducing the capacity of many others.

The hype around virtual production recently has begun to see similar trends, including shocking layoffs and big studio closures from an industry that is at the same time crying out for more trained professionals. [WB UK Closure Link]

and it doesn’t help that at this time we are similarly seeing massive layoffs across many huge tech companies including Microsoft, Google, Amazon, Meta, Disney, Warner Bros., and Netflix that all contribute in some way to the development and success of many virtual production technologies.

but Virtual Production itself is a bit weird…

See, virtual production isn’t a new concept, in fact we’ve seen virtual production techniques in many of our favourite movies and shows dating all the way back to the mid-20th century. It’s from these techniques that new technologies, including ICVFX and LED Volume Virtual Production, are informed.  

If you’re not familiar with what virtual production is, don’t worry, we’ve got you covered with our ‘Virtual Production Explained’

Virtual Production as it’s being talked about lately can be traced to the success of Disney’s 2019 The Mandalorian and the debut of their LED Volume and Stagecraft workflow.

Following the successful implementation of the LED Volume on such a grand scale, LED Virtual Production became synonymous with virtual production in its entirety. But virtual production expands beyond an LED Wall — it involves all of the digital techniques and workflows that can be employed to create visual media. This includes motion capture and tracking, animation techniques and workflows, digital set extensions and more.

When the Mandalorian first came out, it seemed like every person involved in virtual production began to preach that the LED Volume would kill the green screen, that it was the future of filmmaking—and that it would essentially take over the industry. It was a convincing argument, we had just seen it used effectively and our minds were racing with possibility.

But that was well before we understood the logistics of running a successful film, series, or tv show on an LED Volume.

Out of these discussions about the use of virtual production there’s been two schools of thought- Either that it’s the future of filmmaking, primed to dominate the world of production, OR that it’s an overhyped bubble ready to burst.

A lot of the criticism online complains about how expensive running a volume is— it costs $40k, 50k, 60k a day, it’s an unrealistic price tag for many productions. It paints this picture that Virtual Production techniques are only accessible to big budget productions… and right now that might be the case for the grandiose applications seen with giant LED Volumes.

But we are already seeing virtual production solutions being made for indie productions and some already finding their way onto digital content creation applications, like AR Wall’s Home Studio a virtual production solution designed for content creators working at home.

The Breakdown

It’s unreasonable to say that virtual production in its entirety is feeling the same stressors during this massive growth period, so we’re going to focus on ICVFX techniques and LED Volume workflows as we lay out the arguments both for and against.

How Many Stages is There Actually Capacity For?

This is a tough question that we see thrown around quite often, and it’s tricky because we’re still recovering post pandemic and the industry, like most, is unstable right now.

We’ve seen a boom in studios opening considering in 2019 we could count on one hand the number of studios dedicated to ICVFX on an LED Volume and now we’re looking at well over 300 studios that claim to do just that.

Unless the industry demand can catch up, we expect to see more studio closures, like we saw with the purpose built stage designed for House of the Dragon, and see massive openings like with the specially designed studio at Dark Bay that was developed to facilitate the unique use case of Netflix’s 1899, which has since been cancelled.

The potential of the Virtual Production market is huge, especially as the technology being developed has applications outside of the film market. But we need to see the market stabilize and creatives start to create with this technology in mind before we will start to see that growth mean something.

At the end of the day, it’s not necessarily the amount of virtual production stages being built that will push the industry forward. It’s about the stages that are purpose-built, thoughtfully engineered, and dedicated to virtual production workflows that will emerge as the winners in this space.

Environmental Concerns

Like any new technology there is always a concern over whether this transition from the traditional workflow to the new one will have more detriments in the long run.

And to some LED Volumes look like flashing lights signalling excessive energy consumption and waste. On the surface that’s a valid concern, LED walls cannot be completely powered down and even in “black” mode still draw power and generate heat.

Despite this, their usage also minimizes a lot of the high impact components that go into traditional movie production. By reducing travel requirements, minimizing set requirements, and off-loading a lot of post-production rendering.

If we look at its use case as a stand in for heavy green/blue screen VFX we see a marked improvement from the heavy duty render farms required to generate detail heavy shots.

At the end of the day, just like any tool or workflow, having a green steward on-set can help ensure that your production is always following best practices.

The 3D Environment Doesn’t Look Real:

LED Walls are a relatively new and accessible technology, there are going to be growing pains, and more notably a large shift in production mentality. We can’t just fix everything in post anymore, we have to prepare to have things ready in pre-production.

There are new considerations like asset optimization, environment development and how you’re going to pull off shots with this technology, without that you get big examples of projects using the wrong tools during production. Traditionally these assets and tools were designed for video game development, and if you use these assets at face value you’re going to get a background that looks like a video game.

Obviously that’s not the goal, and there are going to be ideal environments used for ICVFX, but it’s also going to take some time co-ordinating with the artists and developers to create for the film space.

We haven’t reached peak environment building in Unreal, or any engine in that case— never mind put it on an LED wall and expect it to look real. There are amazing Unreal Engine artists that improve the standard with every project they release.

No Standardization

You’ve heard this before— Virtual Production is in it’s Wild West Era— no rules, no tried and true “best way of doing things,” at least not yet.

This new technology is still in its infancy and that makes it even more exciting to many, there is limitless possibility right now. But, what that also means is once a standard is developed, and it will be, a lot of folks currently working are going to be told their method is wrong.

And, if you have people who have never shot on virtual before on set, or a DOP who isn’t on board with the tech, you’ve got a learning curve to get over before things start rolling smoothly.

Big studios that invest in this production technique will require certain workflows that integrate with theirs and produce to their expectations, and until those requirements are standardize it’s everyone for themselves out there.

Versatility

This is the shining light of Virtual Production — Customizable environments. Anywhere that you can imagine, you can create and shoot on.

This is the defining benefit of Virtual Production right now, this is what is making it such a strong force in the market. Productions at all levels now have access to create their stories regardless of many real world constraints.

Industry Expansion

This one speaks for itself.

This technology is opening up an entirely new path for creative development and collaboration, new roles are being created, new studios are opening, and there’s more collaboration between digital creative industries than ever before.

This does counter everything mentioned earlier about studio closures and lay offs — despite that this industry is in a massive recruitment phase — the more stages there are, the more people you need to run those stages. But if those stages shut down, like some of the surprising closures we’ve seen recently, job security could become an issue for many who are trying to make a name for themselves at this time.

Creative Power

Virtual production may not be the solution initially heralded as the destroyer of green screen, but it is a useful tool to add to the filmmaker’s toolkit.

Right now these techniques are making the impossible possible, and many filmmakers are taking notice.

But is it a Tech Bubble?

Easy answer is we’re not sure.

But our opinion right now, and remember this is just an opinion, the conclusion will be similar to the winners of the dot-com bubble; think Apple, Amazon, Microsoft, etc.

There are studios that are getting so, so good at what they’re doing, and the way that they produce content, that other studios won’t be able to compete.

Ultimately, I think any piece of viable tech, whether it be a plug-in, or a hardware solution, will be bought out by big companies and optimized to work within their systems and processes.

I also think it’s clear that as time goes on studio rental costs will go down— that’ll benefit some studios that can host smaller budget productions, and hinder studios that need mega blockbusters to make money.

I don’t think that Virtual Production is necessarily a bubble— I think its a land grab— and all of these companies and developers are trying to get their hands on as much of the real estate that’s up for grabs as possible right now. That way, when time goes by, and we find out what really works best for ICVFX workflows, those who have their hands on the most will win the hardest, but also lose the least.

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