Next time you eat lunch with coworkers, ask them, apropos of nothing, "What do you think of outsourcing?" Watch what happens.
Some people hear "outsourcing" and go completely nonlinear. Often, these folks feel personally threatened that someone in India or China will take over their own job. We're just starting to hear that note of fear in the electronic gaming industry, where "offshoring" (subcontracting production work to overseas studios) is quietly becoming standard practice - fostered, in great part, by Ubisoft.
For years to come, we'll undoubtedly read lots of passionate arguments about game outsourcing, but an early spat appeared last year on the IGDA Forums. "McMillanDaniel" wrote, "We don't believe it is good to be a company showing a profit, but seeing your neighbor out of work. Therefore, we don't hire, support, or purchase any products from publishers using offshore resources for development. Do you think graduates from all of the new schools around America for game design and art are going to relocate to offshore facilities to get jobs?"
Whatever your own position, you'll probably agree the International Game Developers Association isn't the best venue to call for America-first boycotts. "Whether you're American, Japanese or Pakistani, the best qualified people should get the job," said poster "KennethN." "If you think all the best-qualified people are American, you're pretty naive. The fact that the gaming industry pretty much spans across the entire globe is something we should be very glad about."
Forum moderator David Weinstein pointed out North America itself is an offshore destination: "So, you want Ubisoft, Vivendi and Atari to shut down all of their North American studios?"
Game publishers keep moving offshore due to high financial pressure. The cost to develop a next-gen console game is well over US$10 million, pushing fast toward $20 million, with two- to three-year development cycles. Companies are cutting corners where they can, and offshoring promises faster production at savings as high as 25 to 50 percent. Business intelligence analyst Screen Digest estimates 60 percent of all games produced today use outsourcing, and projects that the figure will rise to 90 percent by 2008.
In America, a senior game programmer might earn $85-100,000 plus benefits; a senior artist or programmer in Communist China, the workers' paradise, gets below $20,000 and no benefits whatsoever. Of course, the Chinese programmer can't make good games - yet. To date, Western developers have offshored technical and minimally creative jobs: audio, music, art assets and animation, as well as localization of Java-based mobile games across 130 phones. But as they learn the industry and hire Western consultants, offshore companies are gradually taking over more and more aspects of game production: multiplayer modes, sequels and (increasingly) full games.
And the publisher leading the way overseas is Ubisoft.
Ubisoft and the World
Ubisoft, based in Paris, has expanded its game production more broadly and aggressively than any other major game publisher. "The company's 12 in-house production studios are located in nine countries," says Ubisoft's corporate site. "The choice of China, Canada and Romania as host countries for its major studios offers Ubisoft competent, trained people as well as tax benefits or a lower cost structure."
For instance, Ubisoft Shanghai, established in 1996, was the first major mainland Chinese game studio operated by a Western publisher. It claims to be the largest game studio in China and one of the world's largest. Starting with F1 Racing Championship, Ubisoft Shanghai has graduated to more ambitious projects, such as the well-received Pandora Tomorrow expansion for Tom Clancy's Splinter Cell. The studio currently employs about 500 people and is growing fast. In late 2005, Ubisoft posted a five-minute recruiting video that boasted Shanghai's virtues: night life, sports, food and ubiquitous English. "Ubisoft Shanghai is a team with a purpose," says the video, "to break boundaries and to take gaming beyond its limits."