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2018 INSIGHTS on External Development for the Video Game Industry advancing external development for the games industry
2 TABLE OF CONTENTS 04 WHO PARTICIPATED IN THE SURVEY 06 QUICK STATS 07 2018 EXTERNAL DEVELOPMENT INDUSTRY OBSERVATIONS 11 FINDING AND SELECTING PARTNERS/CLIENTS 14 TOP ISSUES IN ENGAGEMENTS 15 EXTERNAL DEVELOPMENT TOOLS AND TECH RESOURCES 16 PROJECT DISCIPLINES AND PLATFORMS 21 SERVICE PROVIDER AVERAGE RATES BY COUNTRY 22 THE FUTURE OF EXTERNAL DEVELOPMENT 26 GLOSSARY OF TERMS
ABOUT 3
What’s Inside?
External development refers to the practice of video game developers /
publishers (buyers) leveraging service providers (sellers) in any aspect of
development including but not limited to art, animation, cinematics, audio,
server-side/front-end engineering, porting, game development, UX-UI, motion
capture QA, localization, and VFX. This report is intended to provide insights
into the changing trends in external development that have occurred in recent
years as it becomes an increasingly integral part of game development.
The statistics in this report were derived from over 180 submissions from
service providers and industry professionals of leading game developers /
publishers worldwide. Data was anonymously contributed to provide insights
on engagements.
The research and data gathered to establish this report was collected by the
organizers of the External Development Summit, with contributions from the
XDS Advisory Committee. Permission must be requested if you would like
to use this information in articles or industry presentations.
Who We Are
External Development Summit (XDS) is the only annual, international
games industry event held in Canada, with a primary focus on external
development for Art, Animation, Audio, Engineering, QA and Localization.
Each year, a broad community of game developers / publishers, service
providers, and middleware providers meet in Vancouver to contribute to the
advancement of the video game industry through collaboration, sharing of best
practices, networking and the delivery of a high-caliber, educational program.
XDS 2018 will take place on September 5-7, 2018 in Vancouver, Canada.
SPECIAL THANKS TO:
2017
Jason Harris, Senior
Director, Worldwide External
Development, EA
Andrea Wood, Telfer School of
Chris Wren Madelynne Kalyk Kelli Brunton Management Graduate
Producer, EA XDS Marketing & Kelli Brunton, Visual
Communications Communications 2016
Chair, XDS Advisory
Committee Dilber Mann, Senior Project
Manager, Capcom Vancouver
GUEST AUTHOR CONTENT DIRECTOR CREATIVE DIRECTOR
WHO PARTICIPATED 4
SERVICE PROVIDER OVERVIEW
Service Offerings
Full SKU Game
Service providers participating in the report represent Development* 32%
a range of different disciplines. 19%
Art
Animation 14%
Engineering 8%
Cinematics/VFX 8%
QA 5%
UX-UI 5%
Audio 5%
Localization 4%
* Results for Full SKU Game Development were divided equally
between Console, Mobile, PC/Online and VR/AR
Client Make-up
Service providers reported an increase in projects from Multinational Games Developer / Publisher 18%
Enterprise (non-games) clients. This may in part be due Small Independent Console Game Developer 15%
to industries like automotive and retail increasing their Mobile Game-Focused Developer 14%
usage of gaming technologies, particularly for
VR/AR applications. This resulted in an overall decrease TV/Media Company 10%
in engagements with Multinational Games Developers/ Enterprise Clients 10%
publishers year over year. We also observed an increase MMO Game-Focused Developer 9%
in engagements with Online Social Game-Focused
Developers. Motion Picture Company 9%
Online Casino / Gambling 8%
Online Social Game-Focused Developer 7%
MOBA Developer 0%
64% 53% 85% 83%
of service providers of service providers of these service of developer/
surveyed have LESS that participated have providers have been publishers expect to
THAN 50 EMPLOYEES only ONE LOCATION in business for MORE work with the same
with only 7% having THAN 5 YEARS service providers again
more than 250 9% AFTER PROJECT
EMPLOYEES operate out of more 44% over 10 years COMPLETION
than 5 LOCATIONS 4% less than 2 years
EMPLOYEES LOCATIONS TIME IN BUSINESS RETURN CUSTOMERS
WHO PARTICIPATED 5
DEVELOPER / PUBLISHER OVERVIEW
Developer / Publishers Platform Focus
Console games 38%
Mobile games 19%
Multi-platform 18%
Browser/PC games 16%
VR/AR games 4%
Social Casino games 3%
Facebook games 1%
Frequency of Changing Partners
Year Over Year 100% are the same
•
75% of service providers are the same year over
75% are the same
• 5%
year for the majority of publishers/developers. 50% are the same
• 2%
< 50% are the same
• 15%
78%
5 15 86% 47%
Average team size Average number of Foresee a growth in Developers/publishers
managing service service providers a demand for external reported an annual
providers developer / publisher development spend of $6-10M or
works with annually (7% decrease YoY) greater for external
(+1% change YoY) development
(10% reported $26M+)
QUICK STATS 6
TOP 3
most important factors
1
when selecting a
service provider:
QUALITY
Quality remains in the top spot YoY
2
RATES SKILL SET
3
Rates moved up into 2nd place YoY Skill Set (formerly Experience)
falls into 3rd YoY”
ART GAME #1 Reason
Companies Engage
accounts INDUSTRY Service Providers:
for 75% of EVENTS to scale teams
all external are the #1 place to deliver more
service providers content &
development meet new clients features
projects
2017EXTERNAL
2018 EXTERNAL DEVELOPMENT
DEVELOPMENT INDUSTRY
INDUSTRY OBSERVATIONS
TRENDS OBSERVATIONS 7
Mergers and Acquisitions Activity is Leading to Consolidation in the Industry
M&A activity has been increasing over the past year with visible consolidation in the industry. Only 11% of SERVICE PROVIDERS
reported that they are actively looking for acquisition targets (19% decrease YoY). 45% of respondents have been approached for
M&A conversations (10% decrease YoY).
What services are companies interested in acquiring?
17% 3D Art
17% VFX
15% Animation
11% 2D
11% 9%
5%
Cinematics
Audio
SERVICE PROVIDERS 5% Mobile Game Development
Looking for M&A Targets 5% Console Game Development
(19% decrease YoY) 5% PC/Online Game Development
5% Engineering
3% AR/VR Game Development
3% Localization
45% of service providers say they are open to being acquired (27% decrease YoY)*
*23% of respondents would not disclose
LEARN MORE
To learn more about the state of M&A, check
out the panel discussion “Consolidation of
Service Providers”, delivered at XDS 2017.
2018 EXTERNAL DEVELOPMENT INDUSTRY TRENDS OBSERVATIONS 8
Distribution of External Development Projects
Service provides reported a more even distribution of the types of companies they work with, compared to 2017 where there was an
increase from mobile companies. Multinational Developers / Publishers moved to top spot, with Mobile Developers moving to third.
New to the list is Small Independent Console Developers in second place.
1 Multinational Developers / Publishers
TOP 3
areas of increase in 2 Small Independent Console Developers
the past 12 months
3 Mobile Developers
Service providers continue to cite Mobile developers in the top-3 client segment over the past 12 months.
The ongoing strength in projects from mobile companies is not surprising given continued growth. According to Super Data’s report,
“Trends and Insights on Games and Interactive Media 2017”, the mobile market is continuing to grow with total mobile games revenue
estimated at $50.3 billion USD in 2017 (15% increase YoY) and growing to a forecasted $58 billion in 2018 (16% increase YoY).1
1
www.superdataresearch.com/market-data/market-brief-year-in-review2018 EXTERNAL DEVELOPMENT INDUSTRY TRENDS 9
Service Provider Art Client Portfolio by Segment, 2017 vs. 2018
2018 17% 16% 14% 9% 8% 9% 9% 8% 9% 0%
31% 17% 21% 9% 3% 6% 7% 5% --
2017
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
n Multinational Games Developer / Publisher n Online Social Game Developer n Enterprise Clients
n Small Independent Console Game Developer n Motion Picture Company n MOBA Developer
n Mobile Game-Focused Developer n TV/Media Company
n MMO Game Developer n Online Casino/Gambling Company
Similar to the results under Client Make-up, service providers cited an increase in projects with
Enterprise (non-games) clients year over year for art and engineering. There was also a noteworthy
decrease in the number of Mobile games clients, possibly due fewer “big bet” mobile titles as
games are becoming larger, more complex and requiring bigger budgets. Also, perhaps due to
noticeable mobile development studio closures over the past 1-2 years.
Service Provider Engineering Client Portfolio by Segment, 2017 vs. 2018
2018 18% 15% 14% 10% 8% 8% 8% 7% 13% 0%
2017 26% 29% 14% 9% 4% 8% 6% 3% - -
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
n Multinational Games Developer / Publisher n Motion Picture Company n Enterprise Clients
n Mobile Game-Focused Developer n Online Casino / Gambling n MOBA Developer
n Small Independent Console Game Developer n MMO Game-Focused Developer
n TV/Media Company n Online Social Game-Focused Developer2018 EXTERNAL DEVELOPMENT INDUSTRY TRENDS 10
VR/AR Still Not So Hot for External Development
Fewer service providers remain optimistic about the impact of VR/AR, and developers / publishers continue to be less convinced this will
1
drive demand for external development. This is further supported by GDC’s recently released report “State of the Games Industry 2018” ,
wherein developer’s outlook indicates “faith in the long-term sustainability of the VR/AR business is slipping.”
25%
SERVICE PROVIDERS see VR/AR as
the #1 driver for increased demand
in external development (12% decrease YoY)
ONLY 9%
of DEVELOPERS / PUBLISHERS report
that they are currently experimenting
with VR/AR AR (5% decrease YoY)
ONLY 1%
of DEVELOPERS / PUBLISHERS
believe VR/AR will drive demand
1
(9% decrease YoY)
1
reg.gdconf.com/GDC-State-of-Game-Industry-2018FINDING AND SELECTING PARTNERS/CLIENTS 11
How do you meet the majority of your partners?
Games industry events continue to be the prevailing method Referrals
for service providers to connect with developers / publishers, 28%
and vice versa. Most results remain consistent with those of
Games
last year, but with an 8% increase in developers / publishers industry
Buyer
meeting service providers by way of “external industry events
reaches out
14%
referrals”. The least effective method is “cold calls” from
service providers.
Service
Providers
35% Online
13% research
8% Internal
2% company
resources
Other
Internal
32% referrals
& company
resources
“Being focused purely on external Games
development, events like XDS provide a industry
39%
Developers /
events
great opportunity for organic networking Publishers
and for developing deeper relationships External
21% industry
outside of production or traditional referrals
business environments.”
Dennis Cooper, Director of External External 6%
Production, Telltale Games partner 2% Networking
out-reach/ sites
cold-call
SERVICE PROVIDERS: Factors Considered When Accepting a New Client Project
The following factors have remained consistent year 1 Potential for future projects
over year. “Availability of resources to accommodate the
client’s needs” comes in forth spot, showing that service
providers make internal resource availability a priority 2 Prestige of project/client
before accepting new engagements.
3 Rates the client can payFINDING AND SELECTING PARTNERS/CLIENTS 12
DEVELOPERS / PUBLISHERS: Factors Considered When Selecting an External Partner
Developers / publishers indicated the most
important factors in selecting an external 1
partner are Quality and Rates, with Team Skill QUALITY
Sets (formerly Experience) moving down to third
place. Proximity to the partner did not appear 2
as a factor this year, which may indicate that RATES
tools and practices for remote collaboration
are maturing. Security controls appear higher 3
on the list, perhaps in part due to IBM’s report TEAM SKILL SETS
“2017 Ponemon Cost of Data Breach Study” ¹
that found “the global average cost of a data
breach is $3.62M USD” – highlighting that poor
4
Credibility / Reputation
security can be very costly.
5
Previous Clients Projects, Portfolio
6
Language/Communication Skills
7
Security Controls
8
Technology Experience
9
Studio Leadership
10
Size of Company
“External partners have leveled-up their studios so holistically in recent years that one of
the few defining factors remaining is QUALITY. I define quality as an all-encompassing
measurement of not only the execution, but the communication of work to be completed.
In the true spirit of fostering an effective bi-directional partnership, BOTH sides need to
over-communicate regarding their expectations of quality. This is why quality is of the utmost
importance when evaluating a new or existing external partner.”
Matt Regnier, Innovator, Apple
¹www.03.ibm.com/security/data-breach/FINDING AND SELECTING PARTNERS/CLIENTS 13
TOP REASONS Developers / Publishers Engage Service Providers
Top reasons developers / publishers indicated WHY they engage with external partners generally remained consistent year over year.
The top change in 2018 is “Flexible Skill-set Ramp-up/Ramp-down” moving up one spot into second place, sending Cost Savings to
third. This may be in part due to developers / publishers preferring a variable team approach during peak production periods.
25% TO BUILD MORE CONTENT AND FEATURES
22% FLEXIBLE SKILL-SET RAMP-UP/RAMP-DOWN
19% COST SAVINGS
12% ACCESS HARD-TO-FIND SKILLS/CAPABILITIES
10% LACK OF AVAILABLE LOCAL RESOURCES
6% SUPPORT CONTENT NEEDS FOR LIVE SERVICES
4% SPEED DEVELOPMENT THROUGH FOLLOW THE SUN (24X7) MODEL
#1 Reason
To build more content and featuresTOP ISSUES IN ENGAGEMENTS 14
TOP ISSUES Encountered with External Development
SERVICE PROVIDERS DEVELOPERS / PUBLISHERS
1 Shifting project schedules and delays 1 Poor quality deliverables
2 Inadequate documentation and direction 2 Iteration issues (volume, speed)
3 Differences between internal and client time estimates 3 Communication challenges
4 Communication challenges 4 Pipeline set-up
5 Legal negotiations drawn out 5 Partners lack capacity
There was much change in the list of issues encountered by There was more consistency to the priority of top issues reported
service providers as compared to last year. Topping the list, by developers / publishers, however “Poor quality deliverables”
and new for 2018, is “Shifting project schedules and delays”. moved to the top of the list from fourth place. “Partners lack
Also new to the list is “Legal negotiations drawn out”. capacity” moved from first to fifth spot.
INSIGHTS from the Top Floor on Common Issues
XDS 2017 hosted a panel of top industry executives sharing On incomplete documentation…
their insights on the state of external development (view full
video below). Two questions addressed the challenges that “Be proactive if you encounter challenges with your client
service providers commonly face. partner. Feedback should be given constructively and include
recommend solutions. If you see best practices from other
clients, share them in order to improve the partnership.”
Rod Fergusson, Studio Head, The Coalition
On major project changes…
“Some changes can’t be avoided. I encourage internal teams
to be as proactive as possible – warn of change and offer a
mitigation plan. Do the right thing and be humane
about the impact.”
Mike Verdu, Senior Vice President, EA MobileEXTERNAL DEVELOPMENT TOOLS AND TECH RESOURCES 15
TOP TOOLS
Tools commonly used to support external development displayed in order of highest usage.
SERVICE PROVIDERS DEVELOPERS / PUBLISHERS
Jira Jira
Excel Shotgun
Project Management Trello Excel
Shotgun Hansoft
Skype Email
Communication Email Skype
Slack
Dropbox Aspera Faspex
FTP FTP
File Transfer Aspera Faspex Perforce
Google Drive
Perforce
Shotgun Shotgun
Email Email
Art Review
Trello
Basecamp
Github
Code Review Github
Code Collaborator
Pipedrive Internal tool
External Company
Salesforce
Database (CRM)
Hubspot
Unity Unreal
Engines Unreal Internal engine
Unity
Emerging For the third year in a row, Substance
was named as the top emerging tool
Tools adopted by service providers.PROJECT DISCIPLINES AND PLATFORMS 16
The number of integrated art projects increased slightly in 2018, rising from 25% of all projects to 28%, while the percentage of
conventional art projects with partial tool pipeline dropped from 36% to 33%. The number of co-development projects saw a dramatic
increase from 8% to 14%. Full Development and Programming projects were not indicated in this year’s results.
TYPES OF ENGAGEMENT
33%
28% 25%
Convectional
Conventional
Art External Integrated Art
Development
Art External
Development
14%
Development with
partial tool pipeline full pipeline without tool pipeline Co-Development
Of all external projects, 85% are for Production, with the remainder equally distributed between R&D, Pre-production and
Live Services Updates at 5% each.
PROJECTS BY PLATFORM
58%
25% 15%
2%
The number of console-based projects remained consistent at 58% YoY (50% Xbox One and PS4, 8% Xbox 360 and
PS3). Browser/PC projects moved to the #2 spot seeing a 4% increase, while Mobile experienced a 7% decrease.
No change in VR/AR projects at only 2%.PROJECT DISCIPLINES AND PLATFORMS 17
External Development within Art Disciplines
There was no change in the volume of photo-real
projects as compared to 2017, however there has been
a 6% decrease in the number of stylized projects.
Stylized 27%
PROJECT TYPES BY
ART
3%
STYLE
Cartoon
Photo Real 63%
By Project Duration
This chart represents average project duration, including all types of projects (art, engineering, co-development, etc.). The 2017 column
combines last year’s average duration of art and engineering projects and becomes our baseline for measure moving forward. The most
significant changes include a 10% increase in the number of projects lasting 9 to 12 months, and 22% decrease in the volume of projects
lasting 12 months or greater.
2017
2018
55%
% of project
engagements
33%
23%
21% 21%
13%
10% 10% 11%
3% months
12 >12PROJECT DISCIPLINES AND PLATFORMS 18
ART Disciplines Remaining Internal
Similar to 2017, VFX and UI/UX remain high on the list of
disciplines remaining internal. There are however niche
service providers increasing their capabilities and capacities
% of Companies Reporting Disciplines Remain Internal
to tackle this type of work. As developers / publishers face Remains Internal
increasing challenges to hire locally, we expect to see more
VFX 31%
VFX and UI/UX work going out of house.
UI Icons 22%
Cinematics has moved up to 3rd spot to remain internal.
It’s possible that year over year, developers / publishers that Cinematics 19%
used service providers for cinematic work were not happy 3D Animation 12%
with the end results (speaks to QUALITY being the overall
#1 issue encountered by developers / publishers). There are 2D Vehicles 9%
also a limited number of service providers delivering high-end 2D Weapons 9%
cinematic services – a number of whom may be challenged
by lack of capacity due to work with non-games clients, like 2D Environments 8%
motion picture an TV. 2D Props 8%
We also observed a decrease in 2D artwork remaining 2D Animation 7%
internal. Mobile developers / publishers may be discovering
Concept Art 6%
the cost-saving benefits of utilizing external partners for this
type of work, in addition allowing them to focus internally on 2D Characters 4%
maintaining live services, analytics and building new features.
3D Weapons 3%
3D Characters 2%
3D Environments 0%
3D Props 0%
LEARN MORE
Learn how Activision’s Alex Stein removed
bottlenecks in his presentation on
“Outsourcing Beyond Assets - Solving Internal
Bottlenecks Externally”, delivered at XDS 2017PROJECT DISCIPLINES AND PLATFORMS 19
ENGINEERING Disciplines Remaining Internal
Although Rapid Prototyping and Engine development stayed
in the top 3 disciplines developers / publishers keep internal, % of Companies Reporting Disciplines Remain Internal
across the board we observed a significant DECREASE in
the percentage of engineering related disciplines remaining Remains Internal
internal. Rapid Prototyping generally remains internal as
Rapid prototyping 45%
developers / publishers prefer core, creative teams to
innovate and iterate efficiently, without the added challenge Engine development 44%
of external communication.
Telemetry 38%
Front-end Development witnessed the most noticeable drop
Server-Side development 35%
as a discipline to remain internal. This may in part be due to
this type of work being less complex, and therefore easier Tools development 31%
to define as discrete work. As a result, a greater number of
Web development 30%
service providers are offering capabilities in this area.
Full SKU console development 30%
As games continue to become larger and more complex,
and local talent is harder to find, developers / publishers are Console game modes 26%
looking to service providers to support engineering efforts.
Full SKU mobile development 26%
As a result, engineering disciplines offered by service
providers are maturing and becoming more readily available. Front-end development 26%
LEARN MORE
As an example of a successful relationship
between developer / publisher and service
provider, check out “Assassin’s Creed
Origins: Ubisoft & Sperasoft Co-development
Engagement”, delivered at XDS 2017.PROJECT DISCIPLINES AND PLATFORMS 20
TOP COUNTRIES Offering Different Types of Work
ANIMATION ART* CINEMATICS/VFX
1 China 1 China 1 United States
2 United States 2 United States 2 United Kingdom
3 Canada 3 India 3 Canada
4 India 4 Canada 4 China
5 United Kingdom 5 Ukraine 5 India
ENGINEERING FULL SKU DEV UX/UI
1 United States 1 United States 1 United States
2 Canada 2 United Kingdom 2 United Kingdom
3 United Kingdom 3 Canada 3 China
4 China 4 Finland 4 Canada
5 Ukraine 5 China 5 India
FINLAND
& CHINA
top emerging markets
for game development
*Art represents a combination of sub-disciplines including 3D, 2D and concept artSERVICE PROVIDER AVERAGE RATES BY COUNTRY 21
Service Provider Average Rates By Country
Average staff month rates were collected from service providers focusing on Art and Development, with the latter representing console
and mobile development primarily. The following shows countries and disciplines that received a critical mass in responses. All rates are
represented in USD.
ART DEVELOPMENT
China $ 4,224 Canada $ 12,210
India $ 4,092 Finland $ 12,551
Malaysia $ 5,170 Spain $ 6,820
Philippines $ 4,290 Ukraine $ 5,324
Russia $ 5,544 United Kingdom $ 9,812
Spain $ 6,490 USA $ 14,355
Ukraine $ 5,742
USA $ 10,076
Vietnam $ 4,312
USA continues to have the highest average staff month rates in Art & DevelopmentTHE FUTURE OF EXTERNAL DEVELOPMENT 22
What are the MAIN DRIVERS for an increased demand in external development services over the next 3 to 5 years?
Both sides believe there will be increased demand for external development due to player’s expectations for more content. This may in
part be due to HD console titles following suit with mobile in delivering more content and playability through live services (I.e. richer/deeper
games). This is coupled with the release of more sophisticated hardware capable of greater storage capacities and displaying higher-
fidelity graphics – which also drives the need to keep development costs flat. Also note that AR/VR dropped three positions for service
providers, and received low priority from developers / publishers.
SERVICE PROVIDERS DEVELOPERS / PUBLISHERS
DEMAND FOR MORE CONTENT 1 DEMAND FOR MORE CONTENT
NEED FOR DEVELOPERS TO DECREASE DEVELOPMENT COSTS 2 NEED TO DECREASE DEVELOPMENT COSTS
COMPETITION FOR NICHE SKILLS IN CLIENT MARKETS 3 RICHER/DEEPER GAMES
VR/AR
4 COMPETITION FOR NICHE SKILLS
90%
of developers/publishers responded that the need
for more content is driving demand! (5% increase YoY)THE FUTURE OF EXTERNAL DEVELOPMENT 23
WHAT DISCIPLINES are service providers optimistic about growth in demand for services over the next 12 to 18 months?
MOST OPTIMISTIC ( 10 is highest)
ENGINEERING
ART
ANIMATION
AUDIO
QA
UX-U
CINEMATIC/VFX
LOCALIZATION
1 10
3D Artwork and Concept Art are two areas predicted to see significant growth.
86%
As games get bigger/deeper and with the proliferation of platforms, 86% of developers/
publishers are seeing a growth in demand for service providers at their company
(7% increase YoY)THE FUTURE OF EXTERNAL DEVELOPMENT 24
In what areas have developers / publishers seen In what areas do developers / publishers
a growing demand for external services in the expect to see growth/demand in the
PAST 12 MONTHS? NEXT 18 MONTHS?
3D CHARACTERS 1 3D CHARACTERS
3D PROPS 2 3D PROPS
ALL OTHER 3D ART 3 ALL OTHER 3D ART
VFX 4 VFX
3D ANIMATION 5 3D ANIMATION
CONCEPT ART 6 CONCEPT ART
UX-UI 7 UX-UI
ENGINEERING 8 ENGINEERING
CINEMATICS 9 CINEMATICS
TOOLS DEVELOPMENT 10 FULL SKU OR CO-DEVELOPMENT
areas of less growth
The bottom three areas where developers / publishers do
not expect to see much growth are: VR/AR development,
2D casual art, and 2D animation.
only 6%
of developers / publishers expect to see a demand in VR/
AR development in the next 18 months (11% decrease YoY)THE FUTURE
THE FUTURE OF EXTERNAL
OF EXTERNAL DEVELOPMENT
DEVELOPMENT 25
Main concerns about the future of external development
SERVICE PROVIDERS DEVELOPERS / PUBLISHERS
Greater number of competitors in emerging markets are vying Service providers taking on more enterprise (ie. non-game)
for projects at a lower cost, which in turn impacts profitability clients could reduce resource availability for traditional games
for established service providers clients, therefore adding risk to their projects
Lack of willingness on the part of developers / publishers onsolidation among service providers could potentially cause
C
to mutually support the training needs of service providers a number of issues:
required to ramp-up on proprietary engines as learning • reduce competition among the top companies.
curve is extensive
• lead to rate increases for the top companies that have been
acquired
Maintaining reliable and sustainable flow of projects, with
developers / publishers that may be playing wait-and-see • o
ne bad decision by the parent company could be
with the market detrimental to all of the entities that have been acquired
• w
ork may be sub-contracted to different entities that have
or longer term, the prospect of tools and tech that
F been acquired
automate the asset creation process, or make it simple for
non-experts to perform, therefore moving service provider ervice providers moving in to co-development and creating
S
down the value chain their own IP means they could become future competitors to
their current clients
Inability to hire local talent can hinder some service providers
from accepting new business, therefore potential clients are ack of capacity can mean teams are fighting for the best talent
L
turned away and bandwidth
Some service providers experience an increase in demand olitical and economic instability in some countries can cause
P
from companies outside of the games industry. Managing issues working with partners
these new requests with traditional games clients has
become a struggle
alented artists leaving credible companies to start their own
T
art studio, but without knowing how to run and establish a
credible business
On the importance of effective PLANNING and PRE-PRODUCTION…
“Whether it’s scoping decisions, art direction choices, or game design; teams all too
often enter production with many critical aspects of the game unproven. Ramping up an
external partner without knowing exactly what needs to be built, or how to build it, leads
to wasted work and chaotic production. It stresses both the internal and external teams,
typically resulting in: inconsistent quality, redundant work, technically inefficient content,
and content ‘debt’, that either has to be cleaned up later – or worse, gets propagated
over multiple products. Investment in thorough preproduction, and stress testing
workflows internally – ahead of external ramp-up – mitigates headaches downstream. It
results in higher quality, healthier teams, and ultimately saves money!”
Ricki Martin, Worlds Director, Electronic ArtsGLOSSARY OF TERMS 26
The following definitions may be subject to the context in which they were used in this report.
Co-Development Industry Professional (buyer)
Cooperative engagement where significant An individual under the employment of a
parts of development are shared by a client video game developer responsible for
and service provider managing, influencing or decision making
for external development.
Conventional Art External Development
(without tool pipeline) Integrated Art Development
A service provider builds art content without A developer’s full technical pipeline is used
any tools to integrate or export the assets to by the service provider
the developer
Photo Real Art
Conventional Art External Development Art that is intended to simulate aspects of the
(with partial tool pipeline) real world, whether organic or inorganic,
A service provider builds art content with the as realistically as possible
support of tools that allow them to export
content, or use a viewer to check their work Service Provider (seller)
A third party external partner hired to contribute
Developers / Publishers (buyers) to certain or all aspects of game development
Companies that develop video games and/or
Stylized Art
publish games that they own, or publish games
on behalf of other developers Design according to a style or stylistic pattern
rather than according to nature or tradition
External Development
The practice of video game developers and
publishers (buyers) leveraging third party service
providers (sellers) in any aspect of development
Full Development
A developer requires a full game to be
developed by service providersEXTERNAL DEVELOPMENT SUMMIT For more information about the External Development Summit (XDS), please contact us at: info@xdsummit.com www.xdsummit.com
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