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Study Finds Mixed Response To Video Game Outsourcing

Study Finds Mixed Response To Video Game Outsourcing

July 25, 2006 | By Jason Dobson

July 25, 2006 | By Jason Dobson
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Amritt Ventures, a corporate advisory service, has published the findings of a recent survey regarding offshore outsourcing within the video game industry, noting a mixed reaction from the 317 United States game-industry participants surveyed between May and July 2006.

The firm found that 8% of participants representing companies that have been outsourcing for over a year had dropped the vendor picked initially to handle the outsourced labor. In addition, another 33% added new vendors due to disappointment or issues regarding the work provided by the initial vendor.

The study also found that 44% of respondents saved less than they had expected from outsourcing, while 19% saved about as much as expected. The firm reported that 6% indicated a greater cost savings than what was anticipated, while 20% reported that savings was not their motivation in outsourcing at all.

As noted in the previous year's report, art was the most outsourced area in 2006, with 43% of those surveyed saying they use offshore agencies for art needs. The study also found that functions of quality assurance, programming and porting were among the lowest in terms of outsourced volume.

Gunjan Bagla, Principal of the Game Industry Practice at Amritt, commented that 58% of those who participated in survey noted that the that the process of offshore outsourcing was “significantly harder than they had anticipated, while only 18% found it much easier than they expected.”

“It’s reasonable to add new vendors due to capacity issues as 19% of our respondents did, or to reduce risk, as another 15% of respondents reported. But disappointments over quality and schedule indicate systemic issues,” added Bagla.

However, of those who noted disappointment in outsourcing experiences, only 6% indicated that they would consider bringing the work back in-house, while none of those polled actually terminated all outsourcing initiatives.

“Clearly global outsourcing is established as part of the ecosystem in the games business, despite current teething pains,” noted Bagla.

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