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Is it the End for the Visual Effects (VFX) Industry? Why Hollywood Could Look Different

VFX studio

The visual effects industry has arguably become one of the most important components in the financial successes of the biggest films over the past 20 years. Looking at the top 10 grossing films of all time (Avatar, Titanic, and The Avengers sit at the peak), the greatest similarity connecting them is their heavy use of spectacle and special effects. Those effects come at a high cost.

Visual Effects Lacks Support

Several visual effects (VFX) houses (including Oscar-winning Rhythm & Hues who worked on Life of Pi) have filed for bankruptcy laying off large portions of their staff. While film production companies continue to earn profits through ticket sales, VFX houses aren’t afforded the luxury of reoccurring income, working based on flat one-time fees. Even though the cost to use VFX houses does take up a substantial portion of a film’s budget, these companies never gain more income other than the initial fee they charge to work on the project. Hollywood tends to be frugal, and cutting costs where possible is a safe bet to rake in extra profits. Unfortunately for the VFX houses, because of overseas competition and the quickly growing industry they fall into, movie studios have begun to find cheaper ways to get their special effects.

While already facing declining income from large film studios, VFX houses are also lacking in support being given by some of the bigger names in Hollywood. At the Oscars, Ang Lee failed to recognize the VFX Company which won Best Visual Effects for Life of Pi, a film he directed. Earlier in the evening a member of the same VFX team had his mic cut off and was ushered off stage after speaking out about the financial woes of his company during their Oscars acceptance speech. While these examples both happened at the same venue, there hasn’t been much in the way of expressed support from Hollywood. As film budgets become more cumbersome, there doesn’t seem to be any real vocal advocates for the big effects companies, especially from their largest employers.

life of pi photo

Repercussions of Hollywood

An important question to ask is what kind of implications this will have on Hollywood and films in general in the foreseeable future. Will we see a difference in the types of movies coming out, ones that rely less on digital effects? Or is Hollywood just finding their spectacle makers in different places? Since the past two decades have been dominated by effects heavy films, it seems unlikely that film studios will change their model of business, continuing to rely on high spectacle VFX heavy films, especially if they can find the tools to make these movies a possibility at a much cheaper rate.

As the technology to create high-end special effects becomes more readily available it doesn’t seem like Hollywood will change course on how it allocates money for its films. We may see several smaller VFX companies pop up, possibly from the remnants of former big players in the VFX industry, with some of the better known and more seasoned veteran digital artists staking a claim in newer companies. So while we may be witnessing the departure of some of the larger VFX houses we have come to know, we most likely haven’t witnessed the end of the types of films we have come to love.

Join the conversation

2 Responses to “Is it the End for the Visual Effects (VFX) Industry? Why Hollywood Could Look Different”

  1. Scott Squires on August 10th, 2013 7:25 pm

    Anyone who isn’t paid in visual effects needs to quit. Anyone experiencing these things should post their experiences to http://thevfxwatchers.com You can do it anonymously. Unless you speak up these types of companies they will continue this type of poor business and others will be losing their pay checks.

  2. Devismita Bhattacharya on December 29th, 2015 1:07 am

    Hi! I’m student From MAAC institute.My course is AD3D EDGE Animation Course I’m bit concerned about what major to take VFX or 3D animation. Can you give me some pointers.I wanna Work in the movie or entertainment line for sure.

About the Author


Glenn graduated with a BA degree from Columbia College in Chicago for Film Studies and hopes to one day be a feature film director. He has directed music videos, is a professional musician in the band Farraday and is an avid lover of all things sci-fi & fantasy.

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