The animation, VFX, and games industries are in crisis.
In truth, they have been for over a decade. I first noticed the pattern in 2010, and now, with the collapse of Technicolor and the 10,000 lost jobs, the conversation is surfacing again—just like it always does.
Many blame “management,” but management is simply following the standard industry model: paying for the previous job’s expenses with the current job’s revenue. I’ve never seen it done any other way in a VFX company.
Others blame “AI,” yet AI has barely been adopted in production.
The real problem is much simpler:
Movies now cost more to produce than the market can afford.
That’s it.
Consider the numbers:
Arcane cost $80M to make a season. Netflix pays about $15M per season.
Animated films, even post-COVID, average $137M at the box office—roughly $67M back to the studio.
But they cost $150M to produce.
These numbers don’t add up.
Now imagine:
What if Arcane cost $10M per season and sold for $15M? That’s a business model.
What if an animated film cost $40M to make and earned $67M? That’s a business model.
Why Isn’t Anyone Talking About This?
To understand the silence, we need to look at how studios actually operate.
From public company data, we see that 70% of revenue in VFX studios goes to artist wages.
The artist in me cheers, but the business owner in me pauses—because stable businesses don’t allocate 70% of revenue to wages. That’s why studios must fire people at the end of every project.
Studios recognized this risk long ago, which is why they now outsource everything but the IP-generating story department. This shifts financial risk onto vendor studios instead.
But here’s the real question: What kind of work is that 70% funding?
Nobody talks about it because we lack the vocabulary to do so.
The global content creation industry—animation, VFX, and games—employs hundreds of thousands of people across thousands of companies. Our pipelines are among the most complex on the planet. We have dozens of specialized departments, each requiring years of training, operating across dozens of unique software packages.
On top of that, we manage a supply chain that moves vast amounts of digital data between studios, translating it into formats each studio can use.
And how do we handle this complexity?
Manual labor.
Despite working on computers in the digital age, artists spend 80% of their time finding files, setting configuration values, and debugging broken scenes.
This sprawling global workflow is reduced to two vague industry buzzwords:
Pipeline. Workflow.
These words are used at the highest levels of every studio I’ve worked with, yet they mean everything and nothing at the same time.
Compare that to manufacturing, where even non-experts recognize distinctions like:
Hand Tool
Power Tool
Machine Tool
Industrial Robot
Assembly Line
Factory
Supply Chain
Each term represents increasing complexity, and we intuitively understand their differences.
Now consider the business world. Most companies have a Chief Operating Officer (COO)—someone responsible for operational efficiency, working alongside the CEO and CFO.
Studios?
No COO. No analytics on operations. No one accountable for improving efficiency.
The Universal Complaint
Talk to any artist, and you’ll hear the same thing:
“The pipeline sucks.”
Artists hate their working conditions. They spend 80% of their time on non-creative tasks and are routinely forced into unpaid overtime because the systems they rely on are inefficient.
They talk about it amongst themselves but rarely with management—because even if they did, there’s no clear way to articulate the problem.
Think about that.
The industry is collapsing.
We blame “management,” but they’re all operating under the same flawed system.
We blame “AI,” but AI isn’t even in widespread use yet.
The real issue? Operations.
70% of revenue goes to wages.
80% of artist time is wasted on manual, non-creative tasks—on a computer.
That means $5.6M of a $10M budget is burned on inefficiency.
And yet:
We don’t have a job title responsible for fixing this.
We don’t have a vocabulary to describe the systems needed.
We don’t even know who to hire to solve it.
We can either start treating operations as a real problem—or we can keep going out of business.
The choice is ours.
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