Game studios favor outsourcing non-core activities, says 80 Level study

CALIFORNIA, UNITED STATES — A recent study by 80 Level provided an in-depth look at the growing trend of outsourcing in the game development industry.
The comprehensive report, titled Gamedev Report: Outsourcing vs. In-house, examines the benefits and challenges of outsourcing and offers valuable insights for game studios worldwide.
Outsourcing preferences in game development
The June-July 2024 study surveyed 181 game development professionals from 54 countries, primarily in Western Europe and North America.
The respondents, who were directly involved in game production, shared their experiences and perceptions of outsourcing.
According to the survey, game studios are more inclined to outsource non-core production activities. The most commonly outsourced areas include:
- Localization (33%)
- Quality Assurance (32%)
- Animation (24%)
- Sound Design (24%)
- Porting/Remastering (23%)
- Trailer Production (23%)
- PR/ Marketing/ Social Media Management (21%)
- Engineering (21%)
- Market Research (10%)
- Extended Reality (AR/VR/MR) (2%)
Interestingly, while Art Production was identified as one of the least preferred areas to outsource, it was still frequently delegated to third-party companies (61%). This contradiction highlights the complex decision-making processes within game studios.
Cost-effectiveness of outsourcing vs. in-house development
The report also delves into the financial aspects of outsourcing. It reveals that outsourcing can be more cost-effective than maintaining an in-house team, especially for short-term projects.
Due to additional indirect expenses, the true cost of hiring an outsourcer is approximately 18% higher than their hourly rate. Conversely, the actual cost of an internal employee can be up to 50% higher than their hourly rate when considering benefits and overheads.
Quality and communication challenges in game outsourcing
One of the significant challenges identified in the report is the quality of services provided by outsourcing companies. Nearly half (47%) of the respondents reported dissatisfaction with their last outsourcing collaboration, primarily due to low-quality services and communication issues.
The study emphasizes the importance of a comfortable communication process, which was deemed more critical than the price by 44% of game studios’ decision-makers.
Future trends in game development outsourcing
The outsourcing market is expected to grow significantly, with predictions indicating it will reach 1.8 billion USD by 2030.
The study anticipates that the need to meet content production demand and the lack of human resources within game studios will continue to drive the trend toward outsourcing.
80 Level’s study provides a comprehensive overview of the current state of game development outsourcing, highlighting both its benefits and challenges.
As the industry evolves, game studios must carefully consider which aspects of production to keep in-house and which to delegate to external partners to optimize efficiency and maintain quality.