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Monday, March 13, 2006

Outsourcing Video Game Development

In four years time, almost half of video game development will be outsourced, so sayeth a study:

Specifically, Screen Digest says that game development expenditures are mostly being shifted to outsourced services providers in Eastern Europe and South Asia. Their report Outsourcing in Next Generation Games Development estimates that the market for games outsourcing will reach $1.1 billion by the end of this year and will grow to $2.5 billion by 2010, which would mean outsourcing would actually represent around 40 percent of total games development expenditure. Although outsourcing is already common today (an estimated 60 percent of studios outsource), Screen Digest expects that figure to reach 90 percent by 2008.

Not surprisingly, Screen Digest points out that this trend has been fueled by the transition to next-gen consoles, the cost of making games for which "threaten to undermine industry profitability." Because of the demand for high-definition visuals and increased art requirements, production costs for making next-gen titles could rise by as much as 50 percent, states the report.
-- Outsourcing: The Quiet Revolution

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