Amritt Ventures Reports: Capacity Concerns Rival Cost Pressures as U.S. Game Industry
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Concerns about production capacity are almost as important as the pressure to contain costs in driving game developers to use more offshore outsourcing according to the Amritt 2005 Outsourcing Trendlines Study released today.
“As the industry gears up for next-generation games 30% of respondents cited capacity as the top reason for increased outsourcing compared to 34% who cited cost” said Gunjan Bagla Principal of the Game Industry Practice at Amritt. “This indicates that smaller game developers as well as large ones are likely to be thrust into becoming global players very shortly.”
Art was the primary function where game studios planned to increase the use of outsourced resources with 81% of respondents planning to outsource some art next year. Surprisingly game programming was the next most frequently cited skill likely to be outsourced in 2006.
The study also finds than the big offshore gainers in this move are China and India. 42% of respondents said they were likely to send more work to China and 38% mentioned India. Significantly 10% said that they intended to outsource more work within North America. Clearly offshore outsourcing is not the right solution for everyone.
By the end of 2006 outsourcing is projected to become spread across the overwhelming majority of game developers. 78% of respondents planned to increase outsourcing next year compared to 11% who don’t plan to increase outsourcing. Another 11% could not say or were not sure.
At the same time game industry participants have major concerns about outsourcing. 38% are concerned most about loss of control of their in-house projects while another 32% said that language and communications issues were their top concern as they increased outsourcing. A smaller number 22% were worried that game quality may be affected by outsourcing larger chunks of work.
The Amritt 2005 Outsourcing Trendlines Study is based on responses from 259 game-industry participants and was conducted between March and June 2005.
