Is traditional game outsourcing on its death bed?

Above: Stefan Baier of Streamline Studios.

Image Credit: Streamline Studios

GamesBeat: You’re also arguing for more expertise, as opposed to simply low-cost alternatives.

Baier: That’s exactly where it’s going. Of course you can always get it cheaper, but this is about driving value. This is not about going out and trying to save a penny. You need to understand that working with another company, whichever way you turn it, is a significant investment in time and internal staff. All the hidden costs that come with that, you need to account for them. You need to know what you want as a return. Any large company, there’s only so much bandwidth for building partnerships. You need to wisely choose the ones that will bring your overall value up the most.

If I were a company and I had to choose, I would choose partners that might not be the cheapest, but they’ll be that perfect balance between the expertise I get access to, the value and balance they bring, and the stability they add, instead of going for the cheapest option of the day, or the hyped name of the day. That doesn’t work. There’s too much rotation.

Games are difficult. You need to keep everything as stable as you can. We see this with the people we work with. They can afford to pay for the right company. What they can’t afford is to have a $100 million launch go wrong. That happens when you go with the company that’s underprepared. If the man-month rate is $5,000 or $10,000, that still doesn’t sound like a lot of money compared to a $100 million mistake.

GamesBeat: If you put a timeline on this, how recent would you say the thinking is?

Baier: We’ve been operating in this model in some sense or another for 10 years already. 2006 or so, this started to come up. Educating people on how normal maps work, taking that whole generation forward, working with Epic and then broadening that horizon. But it’s really the last few years where it’s become dominant for us.

It’s also being able to choose our partners more purposefully. We do care about having the Perforce engine integration, having the builds attached, having full access to it. The last five years have seen that model take off for us in a strong way. At this point we’ve become essentially exclusive.

It’s still an education thing sometimes. People come to us and say, “Oh, are you making props?” Well, we can, but generally we do that as part of a bigger goal-oriented project. We usually have milestones that are less about making 10 cars and more about, “What are you trying to achieve in this chapter of the game? What are your pain points internally at the main company? How can we help with that?” That’s why we have an engineering team, content team, animation team, design team, all working together in one location. That’s another choice we made. We didn’t split the team up into different locations.

Above: Stefan Baier of Streamline Studios speaks at MIGS 2016.

Image Credit: Streamline Studios

GamesBeat: Is this keeping you competitive with other large outsourcing companies?

Baier: We don’t really consider ourselves part of that space. We don’t compete on price or volume. Someone else can make you 50 cars in a month. We don’t compete with that. We ask, “How can we partner with you and help you be successful?” Whatever that means, it tends to be a long-term answer. Something that takes investment on both sides in getting to know each other. It means traveling. It means talking to each other and finding weaknesses on both sides. It’s people.

We try to help build those communities. In Malaysia there’s a conference called Level Up KL. The Malaysian government is very supportive of the industry. We’ve helped put on that event as well. Our CEO gave a keynote mentioning the other companies in our space. “These are the local heroes in Malaysia.” We want them to be successful as well. We’re all facing the same challenges.

GamesBeat: What are some things about games that you think drive production? How do you deal with repetitive tasks? Procedural generation has made some tasks easier.

Baier: Certain types of games will lend themselves more easily to mass production. Replicating a city, in some sense, is easy. You just take pictures of the real city and make this many trash cans, this many brownstones, and you’re off to the races.

When you’re dealing with a more complex overlap of technology and creativity, it gets harder. Let’s say you’re making a fantasy city. You need to spend more time in preproduction. What does this world actually look like? How does everything function? How do you drive gameplay ideas into that? Then you have to constantly navigate between the technology that’s being built, which has particular needs, and what you build with it. You also have gameplay requirements which are often shifting in the first years of production, and the creative and content production aspects.

All of these factors rotate around. When you look at mass production, they usually wait until they’ve passed through most of that, and then there’s one year or less of insane production. That’s when they go to China and say, “Give me 300 people to pump through this stuff.” But that’s a painful process. It all happens in a short amount of time, and it burdens the main developers with parsing through 300 man-years of work before launch.

We avoid this with our partners because we work with them from the very beginning. We can help solve these problems, so it never piles up in the same way. It depends on the product you’re making, the ambitions involved. We tend to work on complicated projects – either creatively complicated, technologically complicated, or both. That’s where our strengths come out. We tend not to work on sequels where all the problems are solved. If it’s Unreal engine, sequel number four, you’ve built the city before but it’s in HD now, you don’t need me. But for pushing the creativity angle forward and keeping it stable, that’s where we tend to come in.

GamesBeat: I still see production problems with different games. Mafia III was a good example. They spent five or six years on it, but the last couple were the most focused for them. They raced to the finish line and had a very good story and all that, but players complained about bugs.

Baier: One thing that happens there is that they underestimate the importance of involving partners early and giving access to the technology. I don’t know anything about the Mafia engine, but—open-world engines, they’re tough to deal with sometimes. They’re usually built internally. The teams building them never think about what happens if they move that technology to a partner. We’re experienced with that now, but there’s a whole process at our IT team, how they work with other IT teams and take this technology somewhere else, make sure the plug-ins and everything work.

The earlier we begin to do that, the more we avoid those issues. Because we have the technology on site – most of them don’t do that – we can solve bugs as they appear on our side, instead of having to wait six months until they have time to implement on their side. These production problems are a key reason why we tend to get involved early.

Above: A visual depiction of BioShock Infinite’s immigration policy.

Image Credit: Irrational Games

The way we put it is, “people, process, technology.” It’s about people. You need to travel to each other. You need to have the right people talking to each other. Process, there needs to be a regular understanding of how we deal with each other. Technology, both getting their technology on site and our technology to them as well. We have our own management tools, Stream Frame, a web-based tool for managing our internal teams and our interactions with other companies. That allows us to keep everyone on the same page, even if it’s a very large production.

Again, you need to invest in your own technology. If you challenge your partner to invest in making their tools more compatible for off-site use, it’s only fair that we do the same thing with our technology too. That costs money, but you have to spend that money. We don’t compete on price, but we reinvest our money internally to build a broader and more balanced experience for our partners. That’s where we see the future going.

GamesBeat: How much are some of the other tool vendors helping? Unity’s whole pitch is that you can run your game on any platform. They take over some of the work of porting, which simplifies a task outsourcers used to do.

Baier: It definitely does. It’s allowed us to move the conversation a bit from the technical side to the creative side. You see more companies venturing into making games. The Unreal engine, Lumberyard, Unity, that’s all very good for the industry as a whole. It establishes a more common baseline for everyone.

About half of what we do is still custom engines, especially the bigger and more complicated stuff. We’re attracted to complex projects. But we’re seeing the conversation shift when you talk about, say, an Unreal game. Porting comes up less. It’s more about, “Can you take over a part of this game?” Because everyone is so familiar with Unreal, it’s easy to do that. We also develop our own internal games with Unreal.

The porting conversation goes away, but other places where help is needed come up very quickly. Especially now, with games as a service, it’s less about porting and more about season two, season three, thinking in the long term. That plays into a model where it’s all about understanding how you’re thinking today as a partner. We’ll be able to anticipate and work with you two or three years down the road. A lot of these companies really do plan their content that far out, even after launch, if they see there’s traction.

Above: Pillars of Eternity

Image Credit: Paradox

GamesBeat: What are you working on now that’s filling out your ambitions?

Baier: We can’t talk too much about that. What I can say, this press release we had with Square Enix a couple weeks back—obviously we’re a long-term partner with Capcom, as well as others. We see a model where, in simple terms, a lot of developers are just tired of having to micromanage all their partners.

A lot of conversations we have with new companies, we hear the same thing. “We’ve used these outsourcers for a long time, but it’s exhausting. We’re looking for new options to try.” Then we tell these guys how we do stuff, and it sounds great to them. They can hand us this whole chapter, this whole responsibility, and we can run with it. Many teams are not as big as they used to be. They’re so preoccupied with a certain aspect of the game that they’re happy to say, “You guys can handle multiplayer. You guys can handle chapter two.”

It helps with attracting and retaining senior talent, too. There’s a greater sense of ownership in the work. If you’re there and assisting from preproduction to launch, that’s a huge sense of being part of a project. It doesn’t just feel like a black box to us.

A lot of the stuff we’re doing right now is in development for the next few years. But the relationship with Square Enix is a good example. They’re quite forward-thinking. At the press conference, they sent one of their lead designers to Malaysia to speak on our behalf. Those kinds of partnerships, you’ll see more of them. People understand that games are complicated and you need to find partners to work together.

More companies are emerging. Some of the larger game developers and publishers are trying to consolidate. Some people are driving this idea that you can only outsource lower-value work and only the experts inside the publishers could manage outside companies. I beg to differ. There are some companies that might be comfortable with that, specializing in that kind of work. But many companies, in North America and South America and eastern Europe and elsewhere, are saying, “We’re outsourcing, but we’re also experts. We can do much more.”

The trend is going to be more and more obvious. There are companies like this right outside there. They might not be very branded. But I’d call them the industry’s best-kept secret, the experts who actually get the work done. They’re just not on the box. It’s a crucial change that I hope will come in the next three years. Other companies will do what we do and say, “We have an identity. We can be part of the conversation.”

Above: Killer Instinct

Image Credit: Microsoft

GamesBeat: Is virtual reality much different? I see tool companies coming along everywhere to supply different pieces of VR, like eye-tracking. It’s like your analogy with car companies. There are 30,000 parts in VR, and you’re not going to be able to master making all of them.

Baier: You see the seasonality. A lot of companies come up. There’s the “app for everything” syndrome. That’s not what I mean. Rather, I see this phase passing. There are lots of suppliers now, and sometimes it becomes overwhelming. Eventually one of these tool-makers will establish domain expertise all across the vertical. There’s a wave of excitement in VR with 10,000 companies or whatever, but by the end of it there will be just a few expert suppliers who are very good at certain things and they’ll stick around in the long run.

Some people at publishers look at all these companies and think they need to put a lot of effort into managing it, but it’ll manage itself. Experts will emerge, and they should be recognized and given a place at the table as the experts in their space. VR is just the latest example.

Disclosure: The organizers of MIGS 2016 paid my way to Montreal. Our coverage remains objective.