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Is outsourcing a risky move or a winning strategy for game developers today?

Is outsourcing a risky move or a winning strategy for game developers today?

Outsourcing, a widespread practice in global business, has significant implications in the game development industry. While it provides an opportunity for specialized skills and operational cost reduction, there also can be quality control and miscommunication issues. The 80 Level Team carried out extensive research on the outsourcing market, gathering insights from industry experts and surveying 181 game studios across 54 countries. Today, we share a glimpse at our huge new glossy report that will answer all your questions about the market. 

Let's get started. 

Most Likely to Be Outsourced

This won’t be a surprise, but based on the 80 Level Survey results, developers and publishers are more willing to outsource non-core game production activities. Such as Localization, Porting/Remastering, Game Promotion, Trailer Production, and Market Research.

Marco Testini, Founder & CTO at Kabum (Full interview)

If we want to include in outsourcing everything that is not purely art, I think it is appropriate to have specialized external teams doing consulting for sales and porting strategies.

In summary, when asking for outsourcing help it is important to look for specialized teams in specific areas, such as the animation of stylized fantastic creatures or the creation of photorealistic urban environments, etc.

However, most of the respondents are not ready to give away Game Development and Game Design to a third-party agency. This statement is especially prominent for Game Design which was unanimously put in the last place by 37% of professionals. It seems important for the studio representatives to keep the visual side of game production in-house as well. Art Production and Animation were the next least likely to-be-outsourced areas on the list.

59% of 80 Level Survey respondents (107 of 181) have had experience working with gamedev outsourcing companies. In the latest projects in their studios, the absolute majority of them delegated Art Production to third-party companies (61%). It’s an exciting dynamic because Art Production was put as one of the “least likely to be outsourced” list (by C-Level decision-makers, too). Moreover, this field wasn't among those areas where game companies lacked internal expertise.

The overall chart breakdown for this question is quite accurate for small studios (<50 employees). It was more common for the bigger companies to outsource engineering and sound design.

How Much Does Outsourcing Cost?

Among those survey participants who shared information about the outsourcing budgets, we could identify 2 main groups. The first group includes companies that spend large sums on outsourcing projects – more than $200,000 (13%). The second group is characterized by studios with low budgets for outsourcing – less than $10,000 (12%). The rest of the budgets (19%) were distributed somewhere in the middle with an inclination towards smaller sums.

While bigger studios mentioned $200k+ budgets,  about 20% of small studios (<50 employees) also invested more than $100k into outsourcing for their latest projects. 

Through the Grapevine

Personal connections play the most crucial role for game companies looking for outsourcers. 73% of studio representatives surveyed by 80 Level turn to recommendations from friends and colleagues before contacting potential service providers. 

Internet search is the second most popular way to find external agencies for 80 Level survey respondents. Around half of them just go and Google the services they need. Social media channels can also work in connecting game developers and outsourcers, 33% of surveyed professionals go to LinkedIn, Instagram, or other platforms. 18% of game studios’ decision-makers also utilize third-party agencies to find outsourcers.

Christian Retzlaff, Founder & CEO at Game Art Brain (Full interview)

We’re fortunate to have reached a point where clients actively seek us out. This has been the trend for the past two years. Prior to this, we actively engaged in networking at conventions, outreach initiatives, cold emailing, and multi-platform advertising. Presently, our presence on LinkedIn, boasting over 8,000 followers, significantly expands our reach, allowing us to regularly share updates and offers. Additionally, platforms like ArtStation contribute to our lead generation through our impressive portfolio. While occasional client experiences haven’t been perfect, the majority often refer others to us.

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