How much is too much? Depends on what we’re talking about. Price. Profit. Free. Wage. How much?

Between gamers, developers and publishers, there’s some incompatible ideas that go into creating these little bundles of joy called games. These incompatibilities come from all sides and we hear them all the time: Games should make a profit, but they shouldn’t cost too much; Free games should be free, without item shops and other paid gimmicks; Devs should receive a living wage from their work; Companies should make a profit. Some of these parties involved won’t get what they want and it varies by game, with one exception: publishers. They’re the first ones paid so if shit goes down, the only people out of luck are developers and players. There’s plenty of money in game’s development to go around. Shareholders just aren’t interested in sharing the spoils with workers. They clap at board meetings when layoffs are announced.

All involved chant for great games, cheaper games, better game developers and career opportunities. There are always the diehard defenders of meritocracy, as if that’s actually a reality even as developers lose their jobs everyday. It’s like we’re playing musical chairs while pretending that we’re all dancing, all having a good time. As though all of us have a seat we can safely return to when the music stops. Worse are those who think their strength, their willingness to toss a fellow dancer aside in order to assure their own seat will save them from the silence of the music.

But the truth is that there’s no music playing and those with seats have been sitting down all along while clapping their hands and tapping their feet, telling the rest of us it’s a great song and that we’re having a wonderful dance. Some of us believe it. Some of us realized it was all a game eventually, but found we couldn’t stop dancing because it was still a viable option. We thought we were the players, but we’re the game. Cheap games and cheap labor are compatible with each other, but they can’t bring living wages, career stability and innovation. Those are incompatibilities.

Publishers and AAA Development

A recent article on Gamasutra discussed out sourcing. The point of the article was that this is a good practice with many upsides if only one used it properly. At it’s best, outsourcing is a profitable money-saver. Or so it wants us to believe.

The article didn’t mention that outsourcing is devastating. You can’t have well-paid developers, high quality games, a thriving industry, and profitable projects in the long-term while outsourcing. It’s great for depressing wages, lowering job quality, diminishing job security, and devastating industries which in turn devastate our communities. Those distant communities where the jobs are outsourced may initially see some prosperity, but they’re being exploited as cheap labor and are doomed to the same fate. Cheap labor. This idea is incompatible with living wages. 

This isn’t difficult to understand. Suppose I have a large million dollar company in a neighborhood in Silicon Valley California. Suppose I require a staff of 1000 employees to make games each year. Those 1000 employees live locally, where they buy houses, cars, food, and movie tickets. They raise families that go to the schools that their taxes pay for. They use city services and utilities. The residency of these workers boosts the local economy. With their taxes the community can maintain and improve city services like firehouses, hospitals and police departments. They can host things like science fairs, community centers, and computer training programs. The local community college can keep my company’s workforce well-trained. As long as my company does business in the community, it’s prosperity lifts all boats.

Outsourcing destroys this ecosystem. When those jobs leave, unemployment increases, businesses suffer and the city’s expenses go up exponentially due to the sharp decrease in tax revenues. This happens all the time when a job is outsourced – not some of the time, not rarely. Every. Time. I was disappointed, but not surprised that the Gamasutra article was praising its benefits while mentioning none of the guaranteed downsides which seem particularly relevant in the face of large, on-going industry layoffs and chronic unemployment. Honestly, I can’t imagine what working fool in this climate would speak of outsourcing as a good thing. It’s a case of “layoffs happen to those people, not me” self-deception, a willingness to deny the realities of labor.

An article a few years ago published on Forbes that I love to share gives a good summary of the general consequences of outsourcing. Companies may see some savings or an increase in profits in the short-term, but in the long-term this strategy undermines business by alienating workers, customers and communities. This isn’t an extreme case either. When it comes to outsourcing it’s always carried to extremes because the motivation is toward ever more extreme profits. Industries that use it inevitably destroy their workforce, alienate their customers, and decimate their communities.


The actual cost to make a game is beyond living wages for the average developer, even as the company that employs them reaps record profits – but that money doesn’t go to developers, who are laid off once the golden egg is hatched. Even if indies make a game on a shoestring budget, one can’t live on a budget like that. Aspiring programmers who pool their resources to rent shared apartments to use as makeshift live-in development studios are described as resourceful, bootstrapping keepers of the American Dream, ambitious entrepreneurs doing it the “right” way …instead of being seen for what they really are: impoverished workers who can’t find a living wage no matter how hard they work or how efficient their approach. Even those who strike out independently wind up becoming the team bought into a studio by outsourcing. Instead of being hired by EA or Sony, they’re contracted in for singular projects, contracts for pieces of their labor, contracts that promise to lay them off once the golden egg is hatched.

Some developers have taken to profiting at all costs. When your livelihood is on the line you can sell your soul in order to eat, or you can starve. Or at least that’s the way some people seem to think about it. Anyway, those pieces of software that are often labeled games but which work more like Skinner boxes are the snake oil of the industry. They mostly deprive the player of their money while harming their well-being by training them into behavior patterns that are difficult for them to break. I’ve seen these developers defend these products, even though they know the criticisms are legitimate. They believe they shouldn’t be held accountable for their creations. It’s the drug dealer claiming the drugs aren’t damaging lives, but the purchase of drugs is …even though they’re the salesman. And sure, drug dealers have dedicated clientele. Addicts have to have it. If this is the kind of relationship you’re cultivating with your players, please reconsider. There are better, more ethical ways to develop games which don’t involve behavior loops that enrich you while impoverishing your players. This isn’t the kind of compatibility you should strive for.

Developers have to make a tough choice: do they join in the musical chairs, hoping to take a seat next to the publishers, telling the players to dance and promising there’s a seat for them too? Or do they reject the industry business model and change the game? Changing the game is no small task for sure, but those are the only options on the table.

So how much is a game worth again?


We demand innovation. We demand something new and affordable. We’ll usually pay whatever is asked though, as long as the game delivers us something excellent and as long as we have the money.

But with outsourcing driving industry developments, mediocre games are a promise, a mainstay. We can’t get great and innovative games from a model focused on reducing costs and focusing on ever narrower products. In other words, innovation and greater games isn’t a driving factor in game’s development at large. Innovation is incompatible mediocrity.

Developers may individually dream of this. They may individually put excellence in their work. But as long as their pay days are granted by stockholders, they have little control over the direction any given game project will take. They’ll make whatever they’re told to make. That’s especially true if those devs might not have a job when the game is done, or if parts of their team are already outsourced, or if their wages and benefits aren’t worth fighting for.

Skill and experience seem less important than the money. The first question an employer wants to know is “how much” and right after that  “how long”. Lay offs are an industry constant, which means this never really improves. Those are the current career prospects for aspiring game developers.

Outsourcing has helped create an unstable, product saturated market and our communities are littered with the fallout. The next time someone tells you that outsourcing “done right” is a net positive, let them know that outsourcing is never done “right”. Right means taking ethical considerations seriously and it means looking at the consequences of jobs being moved outside of the communities they’re built upon. Outsourcing always has devastating consequence, with layoffs being the most common.

Still think outsourcing is a godsend? A positive good? Ultimately beneficial?

Do you hear music?


11 thoughts on “Incompatible

  1. When James Cameron let’s go 500 people after finishing avatar no one notices, when ea lets go same amount of developers it’s suddenly a disaster. This industry is project base and for some reason it treats itself like Japanese plant in the 70s with lifelong employment.

    Outsourcing is nothing bad. If someone can do a job better and cheaper why should companies pay more?

    • If you want to know the answer, you should respond to some of the points I just made about outsourcing. So right now, I don’t think you read the article (you probably skimmed, which fine — we all do) and if you did, you addressed none of the points about outsourcing.

      So let’s start over.

      Outsourcing always has devastating consequences. It causes spikes in unemployment, it drains money out of the local communities, and it leads to career instability which leads to more unemployment and lower wages.

      Now your question. Companies are free to pay less. But in the long run, they lose money because they lose their competitive edge. In the current climate, ANYONE can make a game without ever making a game. All you have to do is get a pile of money, buy developers, sign them to contracts in which they get a tiny fraction of money, and then you publish that game and reap the profits FOREVER. The developers lose their jobs when you’re done with them. In with that their standard of living gets lower. The lowest standard of living in the country are the homeless. Unless you believe that the homeless deserve what they get, there’s no angle at which you can argue outsourcing is beneficial in the long term.

      Think about that. If you decide to comment again, be good participant and address the content of the article 🙂

      EDIT: I wanted to add that I addressed your question of meritocracy. You’re taking the position that current practices are based on who does the work best. They’re based on how much it costs the company. This is why contract work has become the norm and career positions are becoming rarer.

      • You make assumptions about someone’s reading just like you make assumptions about outsourcing without looking deep enough. I have been in this business for many years. One of the games I helped made is extremely successful. I also ran a largest European video game outsourcing firm.

        What we have learnt over these years is that good games can only be made by cameron or lukas pope, or notch – by very talented people. You can’t put a price on them. Mr Antonov art director for dishonored or city 17 can’t be outsourced.

        But the rest needs to grow up. If some Eastern European guy can make a 3d chair 5 times cheaper, maybe they need to stop talking about community and actually learn to do something special better than anybody in the world.

        You generalize too much and assume there is a lot of talent in this industry. + for every homeless artist in Palo Alto I can give a job to 5 awesome modelers in Ukraine so overall it is beneficial to humanity as a whole.

    • The reason no one cares when 500 people are let go once a movie is done, is because the movie industry is entirely project based and their employees are well protected.

      The games industry does NOT work on a by-project basis. Or rather, most artists do since their industries simply work that way, but the rest of the staff gets contracts similar to the software development industry. That is to say people are hired on with contracts that seem to extend well beyond a single project’s scope and are lead to believe they have a good chance of staying on for multiple games. More importantly, these designers, programmers, IT specialists, and QA testers are not protected – at all. No unions, not one employee-beneficial arrangement in place, nothing.

      No, they have absolutely no valid reason to assume that they’re actually only hired on for a single project. Because the games industries’ big brother – the software development industry – doesn’t work that way at all. Software developers are hired on permanently more often than not and software development companies certainly don’t fire all their employees after they’ve done one measly project. That’s because these employees have great value throughout the entire scope of a project (contrary to artists) and beyond those bounds as well in tasks like prototyping, tools development, maintenance, etc.

      Also in cases of off-shoring – which the Gamasutra article in question is talking about – quality concerns never enter the picture. That’s purely an effort to save money and nothing else. But there’s a good reason why the software development industry has abandoned that practice en masse, which the games industry doesn’t seem to have grasped quite yet. Off-shoring rarely produces anything like a satisfactory result, which means that to get a suitable end product local developers have to be hired on to fix it. Which ends up costing more money than hiring local developers in the first place.

      • @reformed: I don’t write about the movie industry because I’m not a movie fan. I’m a game fan. So the question of why I’m caring about EA and not Hollywood really misses that point.

        I have no idea why either of you think the games industry isn’t increasingly project based. I agree that wasn’t always the case, but it certainly is in a transition phase where contract work is as prevalent as career positions. One need only look at the job listings.

        It’s not that workers assume they’re on for a single project when hired. It’s that we see layoffs every time a project is over. It’s very hard to make statements hat this isn’t happening when the reports are everywhere and have been for years. Google up layoffs in the game industry and read the stories of these workers to see for yourself. People are absolutely being laid off when projects are over, some who thought their job was secure because they’d be with the company for years, others who were previously unemployed and hoping this gig would last.

      • Sorry Doone, my comment was meant to be a reply to reformedgamer. Hope it makes a bit more sense then 😉

        As such this was meant as an indication of why it matters that people get laid off after a game is finished whereas it doesn’t matter as much in the movie industry. Not as a refutation of the fact that loads of employees get laid off after a game is finished. There’s no viable way to argue against that, since it is a rather well established fact.

        And it might depend on the type of job listings you’re looking at. Yes a fair few artist positions seem to be on a per project basis, but when you look at job listings for designers or programmers (particularly the latter), very few appear to be on a per project basis.

  2. 1) re unions. Some day developers will understand that they are the stars of the show and it all depends on them. But i have heard it is very hard to get into the lets say Writers guild.
    2) re outsourcing. No key work is usually outsourced. In my previous company we did lots of art work for Sims 3 and Sims 2. But only boring and tedious work was outsourced – like making 400 types of chairs, tables and other props. No-one was looking for making this in USA. And in most cases the work was not drastically cheaper – outsourcing allows faster scaling of large volumes of simple things. So its not only about the money.

    I think the issue of outsourcing is exaggerated in the post. The problem lies in different field. The major problem is profit sharing. In the movie industry top talent gets lots of profits of the movie making millions as a result. In the video games industry most profit goes to the pockets of shareholders or CEOs of Activisions and EAs. I think game development will eventually become project based.

    • Thanks for sharing your story, but I’m afraid you haven’t addressed the consequences I laid out to show why outsourcing is good.

      You say they’re exaggerated but you don’t address any of the data to prove that it is. I don’t think I’m the one generalizing in that case or assuming things. Clearly I’ve done more reading on this than you have, because you refuse to address the consequences of outsourcing and continue to just say “it’s great”. You’re going to have to address the data if you want to make a case that outsourcing isn’t a problem. Right now you’re just ignoring it.

      The game and software industries are becoming more similar each day and the practice of outsourcing is hardly exaggerated. I don’t even see how one can deny this. Every major company in the games industry uses it and every one of them has lay offs every year. In the US, research shows that outsourcing causes unemployment and that should also be obvious even without the data (if the jobs go elsewhere, locals can’t possibly work there can they?).

      As for the “making chairs” comment, this attitude is part of the problem. Because statements like that show why this is invisible to you. In America, on the one hand we say “work your way up!” then on the other we say “get better skills”. So we expect junior developers to start out in entry positions “making chairs” or what have you until they work their way up in the company. And now you’re here mocking it while denying that outsourcing the job doesn’t lead to unemployment. You can’t have it both ways.

      Address the data: outsourcing causes unemployment in the local/regional market and it lowers wages which lowers the standard of living. Care to address this? Because it happens every time a job is outsourced, even “making chairs”.

      • Well I attack your point, you attack me.

        Addressing your point. I actually addressed consequences of outsourcing by focusing on the positives already, but you keep talking about other side of the coin. Video games outsourcing helped me create 300 art jobs in Ukraine creating communities and market demand – the same things your were striving to create somewhere else. Outsourcing is totally not a problem for us here – we actually raised market salaries by actively recruiting people. Think globally man 😉 the world is better off.

        Average salary for a high quality 3d modeler in EE went up from 12000 US dollars per year to 24000 over last 3 years btw. Hope this puts things in perspective.

  3. I haven’t attacked you 🙂 I’ve only asked you to address the points I’ve made about the consequences. And you still haven’t.

    You don’t seem to have an interest in discussing the topic of the article (bad consequences of outsourcing), so this is much less of a conversation than it ought to be at this point. I appreciate your opinions, but you’ll have to engage that or call it quits. I can tell by the terms you’re using and how you frame the issue (“why should they have jobs when someone else can work cheaper?”) that you’re not all that familiar with how outsourcing works outside of your anecdotal experience (which is totally legit when placed within the context of how outsourcing works). And that’s fine. Most people haven’t read anything about outsourcing and that’s not a judgement against you.

    I’ll be publishing a strict list of reports for you all in a few days. I really don’t get paid to write 30 page essays complete with bibliographies and footnotes on issues like this, though you’re free to pay me to do your work for you. But I expect my readers to not take my word for it and find out for yourselves. There’s lots of freely available reports on outsourcing around the net so I don’t have any reason to expect you can’t learn about it on your own. If I thought this topic were more obscure, I would have published a list of sources in the first place. But I’ll fix that in a few days.

    Anyway, good luck and I’ll hopefully see you around in a few days.

  4. Pingback: Follow-Up Reading on Outsourcing | XP Chronicles

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