Is the gaming industries current dev model in trouble?

Disclaimer: this is not a thread for concern trolling

I want to discuss with you how the industry is transitioning, and what that might mean for Microsoft specifically going forward.

Back in the days game studios were in constant flux. You started a project with a small team, ironing out what the game was supposed to be, then started hiring and blow up the payroll for full production. After the game went gold, you started to let people go and just kept a core team. Thus there has always been high turnover in the industry.

I’m under the impression, that Microsoft walked away from that model, as it also always threatened a brain and talent drain. They tried to keep core teams of varying sizes together at all times. But instead of blowing the team up for full production, they gave the heavy lifting to external studios and teams, basically outsourcing.

Now for the last year we are seeing that new players want to step into the gaming market. From Google with Stadia, over Amazon to players like Tencent and Embracer, just to name a few. All of them need studios and talent to get started. And so we are seeing acquisitions left and right.

What I want to talk with you about is, how this affects Microsoft, and what they might need to do to compete. We saw studios being snatched up that worked with MS in the past. Does that mean they wont be available on the open market for the aforementioned outsourcing work? Will MS be forced to aggressively pursue further acquisitions to not get talent starved? Or would it be enough to “just” grow the current studios, and not have personnel fluctuation there?

What do you think? :slight_smile:

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Outsourcing is a massive thing whether we are talking EA, Microsoft, Sony, Nintendo or even WB. Only firms like Ubisoft and Activision can minimize it and even then they have done so in a pinch (ex. Asobo on Crew 2).

Games are getting too big, and need to be scaled back, and as technology evolves so too should productivity. What teams like Ninja Theory, Asobo and Obsidian have shown is you can do a heck of a lot with a little.

Of course it is, and I don’t want to imply MS are the only ones affected by it.

To me the question is, if this model is sustainable in the near future, with all those small(ish) studios being snatched up left and right. I mean, we know the market is not especially overflowing with (good) IT people, and I can’t imagine that it looks different for game devs.

So, what do?

I do not think it is sustainable, no. And I suspect reducing the required workflow will be a major part of engines such as Unreal and middleware such as Simplygon and Havok. It is starting to reach the point where the overworking is serious for silly or negligable results. I enjoy RDR2 because of the writing, characters and world, not because my horse’s nuts shrivel up in the cold. I think starting this gen we should start moving away from the pursuit of perfectionism and towards the pursuit of good games without a massive monetary and health cost.

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I agree in principle. And especially GamePass is a perfect platform for AA games.

But OTOH you will still need some AAA tentpole releases, just for marketing purposes alone. And how do you get/keep the talent for those in this current environment?

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maybe wait until the games come out

Was there not a ridiculous amount of people working on TLoU2?


And then what? Hire all the people who collaborated on to stay indefinitely?

Just one of the examples that I mean, yes.

Literally every AAA game has huge teams and many outsourced employees so why are you concerned about xbox doing this


I’m sorry, I think I didn’t make myself clear. I am not concerned about MS. I want to talk about a changing environment in game development, where I can see the current model not working for much longer due to less available talent on the open market.

This affects Amazon, Google, Sony, Tencent etc.pp. Of course I want to talk about how it affects Microsoft tho, because of all of those it’s the one I care about the most. :slight_smile:

As long as XGS is able to keep the creative talent that helps make their games good then it shouldn’t matter that much. Studios like Naughty Dog and others continually make great games while constantly swapping out employees.

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I think there are two topics in discussions: Will acquisitions done by other companies harm outsourcing practices? Are game dev relying too much on outsourcing?

Acquisitions are more about creative talent acquisition rather than raw brute force. (And that is why I don’t see the potential of asobo… yet. Have they shown anything creatively unique besides a plague tale? I think they need more freelance-like time to nurture their identity)

Raw brute force is critical, but very variable across development stages and, hence, subject to outsourcing. Variable not just in number of talented people working on the project, but on the expertise required at each step. I don’t think it is sustainable to have all that in-house unless you have a very structured cadence of games (as in yearly releases, scheduled in some manner that workforce and tech can be transfered between teams/projects), which I think it poses a threat to creativity.

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But that’s exactly what I mean - how will they be able to do this in the future, when said talent isn’t available anymore?

That’s basically the Ubi model. And I see how you come to this conclusion.

Ubi games sales are huge, but critics’ and gamer’s average opinion is that all their games are very similar (and a feeling of “oh, yet another AC game”). So it seems there is a tradeoff between these cadence release model and originality/creativity.

(Update: I might have misread your comment, I thought it said “I don’t see how you come to this conclusion”… hence my clarification)

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Google and Amazon can try, but when it comes to western acquisitions, they have been untested (and Amazon coming out with a few duds). New studios will always sprout out too.

When it comes to our internal studio development, in sports you have something called Rebuilding Phase. That’s where it’s at right now. Once we get through it (and we have some of the best in the business; Coalition, Initiative, Playground) we can start to cultivate our own studios ourselves than relying on just acquisitions.

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You have to decide what size of first party is sustainable and can be managed in terms of staff retention and turnover…only Xbox and MS will really know this. Then I think you need to use second party to grow and expand either outsourcing to support existing projects or commissioning full projects via them either direct funded or a partnership model. I think the latter is where MS need to look. They had Ryse for example last time and I think these sorts of relationships are very important because my guess is having much of a larger first party than they do now will potentially become unsustainable and undesirable over time.

Some studios will go away, MS and other companies are fully aware of that, and they still enter into those relationships because it makes sense for them. There will always be new teams to partner with, they’re created practically every day, often by industry veterans. For instance, Dlala, who are now developing Battletoads, spent some time incubating at Rare. And then there are companies who only do outsourcing work, most of which are unknown to the general public.

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I’m sorry I’m not making myself clear any better, English is not my first language.

I agree that these partnership models make a lot of sense, for both sides. My question is how to keep those up in the future, when so many Studios get snatched up for pubs who want them primarily to develop exclusive stuff for themselves?