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My top three predictions for Visual Effects M&A in 2025: 1️⃣ Another mid-sized, London-based VFX studio will get acquired by a post-IPO Indian VFX company in 2025. Several Indian VFX studios have gone public in the past couple of years (the most recent being Identical Brains). An IPO is one way to raise funds for an acquisition. We’ve already seen Phantom FX acquire a majority stake in Tippett Studio in March 2024, and Basilic Fly Studio acquire a majority stake in One of Us in July 2024. London is geographically much closer to India than the West Coast of the US, making it a good “stepping stone” for Indian firms looking to position themselves closer to end clients. And the UK continues to strengthen their tax incentive offering for VFX. 2️⃣ Prime Video & Amazon MGM Studios will buy an AI-focused boutique VFX company in 2025. Sony purchased PIXOMONDO in 2022, ostensibly for their virtual production technology. With demand for VFX production far below peak, it’s very unlikely we’ll see a studio client purchase a VFX studio to guarantee themselves access to VFX production capacity (which might have been a consideration back in 2022.) However, a client studio interested in pushing the efficiencies of AI in VFX production might decide to get hands-on with the development of AI tools. Amazon has the technical capability, culture and cash to do it. 3️⃣ A global-scale VFX studio or VFX group will add a video game external development studio to their portfolio in 2025 My money is on Framestore, who have a track record of astute M&A decisions. (More on that here: https://lnkd.in/gtMdy4-3). Their bold acquisition of Company 3/Method Studios in 2020 more or less doubled the size of the Framestore Group. While DNEG is diversifying into immersive experience, AI, and content (IP) ownership, the success of Framestore’s core VFX-as-a-service business leads to me to believe they could confidently add a video-game-development-as-a-service business to their group, and leverage group-wide core technologies. #vfx #mergersandacquisitions #vfxindustry
Good calls!! On #2… seems to me the real goal for genAi isn’t to optimize or supplant vfx, (though its a byproduct for sure) - it’s a play to replace the camera and everything in front of it. If true, an Ai boutique focusing on deployment/ integration of open source models into the existing pipe could be eaten overnight by the massively funded/ scaled R&D efforts we see by Google, etc. Disney could be a surprising dark horse here.
Framestore bought Method... and basically got a ready made BC studio + other accoutrements. That BC studio is closed today, and my bet is that of all the other staff acquired as part of that merger, very few are still with Framestore today. Based on anecdotal evidence. If the merger indeed was to have a ready-made BC studio, makes you wonder what it was all for, in the cold light of day these many years later...
Couldn’t agree more
Sounds on point.
As always, very interesting! Thanks Joseph Bell.
Co-Founder-Chairman at Crafty Apes. Founder - LumaLogic.
10hI predict a film with 1000 vfx shots will publicly have zero vfx shots!