Movie “The Pirates”, which drew 8.6 million viewers in Korea back in 2014, featured a heavy dose of scenes at sea. Surprisingly, however, less than 10% of all scenes were in fact filmed on water. Most of the film was shot in an indoor set built in Namyangju, Gyeonggi-do, and the backdrop was filled in using 3D computer graphics (CG) produced by visual effects (VFX) company Dexter Studio. Dexter Studio became the first corporation in the film making industry to receive a Commendation for Technological Expertise from the government due in large part to its advanced technology. Mark van den Bergen, the VFX Director of motion picture Avatar, recently said, “Technology-wise, the natural-looking waves, sunset, and whales in the sea created by Dexter Studio is at least 95% of what top Hollywood VFX companies can produce”.
◆ The only publicly listed VFX company in the world
Dexter Studio is a company that produces scenes that cannot be filmed in real life using CG technology. The company is led by Director Kim Yong-hwa, who is known for his work on “Take Off” and “200 Pounds Beauty.” Established in 2011, Dexter Studio is the only VFX company in the world to succeed in its initial public offering (IPO).
Recently, more analysts have touted Dexter Studio as a company with significant growth potential moving forward as it continues to secure new projects and improve its cost variables. Today, Dexter Studio reported its sales revenue and operating profit for last year, which stood at KRW 26 billion and KRW 5 billion, respectively. Although operating profit suffered a slight dip of 0.8% compared to the previous year, sales increased 39.3%. Securities companies are expecting Dexter Studio’s sales to hit KRW 35 billion, a 34.6% increase over the previous year, and operating profit to reach KRW 6.3 billion, a 26% improvement over the past year.
◆ “Dexter Studio will become the best content company in Asia”
The biggest cost variable in producing CG content is labor. On average, Dexter Studio pays each engineer KRW 350,000 per day. This is roughly 30% of what ILM, one of Hollywood’s top VFX studios, pays its employees. Dexter Studio Vice President Lee Sun-kyu said, “If the producers of ‘The Pirates’ decided to commission a top Hollywood VFX company to take care of the VFX elements in the movie, it would have cost the KRW 15 billion. That’s why we’ve been contacted by so many production companies in China and Korea”.
Dexter Studio plans to increase its per capita labor cost to somewhere between KRW 600,000 and KRW 700,000 per engineer within the next two to three years in order to improve its profitability. In other words, its operating profit margins have significant potential to improve over the next few years.
Dexter Studio generates roughly two-thirds of its total revenue in the Chinese market. It recently announced the successful conclusion of its work on “Monkey King 2”, which rose to no. 2 on the Chinese box office list last year. It also secured new contracts expected to run over the next couple of years. Buoyed by its success in the Chinese market, Dexter Studio is looking for further growth engines in China as well. In April last year, it secured USD 10 million in investment from Wanda Group, which owns the largest theater chain in the world. Its partnership with Wanda is expected to give Dexter Studio a chance to expand its market reach moving forward. Vice President Lee said, “We plan to diversify our client base by producing videos for virtual reality (VR) viewing devices as well as movies in the future. We want to benchmark Pixar, which is one of the best animation producers in the world, and become the best content vendor in Asia”.