Issue: Volume: 24 Issue: 3 (March 2001)

3D Drivers




By Samantha Staples

In this era of intense competition to grab and hold the attention of viewers, the demand for 3D content-and for the tools to create it-is soaring. In fact, revenues from 3D software tools are projected to expand at a compound annual growth rate (CAGR) of more than 25 percent over the next five years.

Given all the hype surrounding 3D graphics on the Web, one might assume that Web applications have spurred this dramatic growth. But while Web 3D is clearly poised to become the next big market driver, for now the film and game industries continue to lead the way.

In the past few years, 3D visual effects have played leading roles in many feature films, and, in fact, have been integral to the five top-grossing movies of all time: Titanic, Star Wars Episode One: The Phantom Menace, Jurassic Park, Independence Day, and the original Star Wars. The success of such films has ensured the future for 3D content creation in the movie business, which continues to experience steady growth. Total worldwide box office revenues for the American film industry should top $26 billion by 2005, a CAGR of 8 percent.

3D content has had an even more dramatic impact on the game industry, having been a component of nearly all the best-selling games. The use of 3D should continue to grow as game developers take advantage of the processing and graphics power of the new entertainment-class PCs and next-generation game consoles (Xbox, PlayStation 2, and GameCube), which can support real-time 3D rendering of large environments and hundreds of models at once. In fact, the new platforms will fuel what should be a $21 billion business by 2005.
Professional software currently generates the most revenue in the 3D content creation market, but proceeds from 3D plug-ins will outstrip it in the next five years.




3D on the Web is the dark horse. We hear it coming but just can't see it yet. Despite the claims of dozens of companies that they're setting the revolution in motion, we've seen little practical application of the technology. With forecasted revenues of nearly $128 billion by 2005 for e-commerce and advertising alone, though, the Internet will be fertile ground for the 3D seeds currently being sown. And major Web content providers such as NBC and e-commerce merchants like Sharper Image have already expressed interest in moving their content into the third dimension.

These trends in content creation markets are driving a strong demand for capable tools to produce 3D fare for consumer consumption. We expect to see revenues from 3D tools and plug-ins grow from $384 million in 2000 to top $1 billion by 2005.

Professional tools-with feature sets and prices at the high end, $1500 and above-currently provide the bulk of revenue, and sales are expected to grow at a CAGR of about 15.8 percent over the next five years. Although many of the less expensive software packages are approaching the features of the professional tools, the high-resolution requirements of films and professional games ensure a strong future for products in the 3D Studio Max, Houdini, LightWave, Maya, and Soft image|XSI class.

Growth in the "prosumer" segment-including tools such as trueSpace, Carrara, and Animation Master, which are priced from about $200 to $1000 and used by small production studios, corporations, and even home hobbyists-is anticipated to be more aggressive, around 30.4 percent, simply because there are so many potential new customers.

Plug-ins for 3D tools are a fact of life in the high-end arena, where it can be conservatively estimated that 80 percent of users will buy at least one plug-in, with 30 percent buying three. It's a symbiotic relationship: The most plug-ins are written for the best-selling tools and, as long as features and price are comparable, the consumer is more likely to buy the tool with the biggest variety of plug-ins. With continued growth in professional tools and the largely untapped prosumer market, we expect a five-year CAGR of just over 37 percent for 3D plug-in revenue.

It's a good time to be a 3D toolmaker-one with market and mind share anyway-and the public's increasing appetite for 3D entertainment means talented digital artists will be busier than ever.

Samantha Staples is an analyst with Jon Peddie Associates and author of the 3D Content Creation Report. She can be reached at sam@jpa.com. More information on 3D software tools and the market can be found in the report, published annually by JPA's Software Group as part of the ongoing series, Software Tools & Applications. Contact JPA at 415-331-6800 or www.jpa.com.
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