Outsourcing Game Development?

#1 Well, that's good news / bad news. As a guy who considers myself a software engineer first and foremost, it's scary. I'm seeing a lot of jobs go off-shore, and the salaries within my field slowly dropping. That's nasty for a field that requires so much education.

But this is tempered by two things:

1)I know some of the pitfalls involved in even local outsourcing. It's necessary and desireable many times to get a specialty house or extra, short-term help. But it's no silver bullet. It's best applied only when you have fairly firm, detailed specifications, and really good metrics for gauging progress and accepting deliverables.

2) As a small indie outfit, I'm effectively "out-sourcing" for everything but the code (and I effectively do some of that, too, in the form of using third-party libraries & engines). This is a much cheaper approach than doing it all myself, and yields better results. I need music, sound effects, 3D models, art... So having the price go down on getting these things done professionally is not a bad thing.

I think part of the problem with large retail-industry game developers is what I've heard referred to as the "not built here" syndrome. Possibly out of fear of being held liable for someone else's bugs, and partly out of ego, there's been a resistance to using third-party engines & libraries, or contracting out for anything but specialist content (like motion capture or music composition).

I think the number one effect of this offshoring trend is that the expenses are growing so expensive - and offshoring is so cheap - that its finally breaking down those barriers. The proliferation of the use of high-profile commercial engines are helping here too.

So where's this going to lead? I don't know. Personally, I know there's a lot of "butt-in-chair" work associated with making a game. Tedious stuff that needs to be done for the game to run. Things like user configuration screens, downloading updates to the game, file I/O, audio libraries, etc. The more I can get these things done for me, cheaply, the more I can focus on writing the game itself. And that's the part I wouldn't necessarily trust to a third party to do on contract, anyway.

#2 I've worked at a studio that used special visas to bring in Russian, Indian, and Chinese programmers at much lower starting salaries. I recently read an article where IBM stated it plans to ship 6000 programming jobs overseas to countries like China, India, and Brazil where programmers with 3+ years of experience can be paid $13 an hour, and not receive any benefits, like medical coverage and retirement.

As someone hoping to major in computer science this is a real issue with me. How are American graduates expected to pay off their student loans if wages continue to drop due to outsourcing? I am planning to focus on game programming, so thank you for your article. I hope that this does not become a major trend for game publishers.

#3 We have so much work.
I cannot handle it all.
I've already hired one friend.
and now im gonnna hire another.
and I still dont have enuff to handle the workload.

I might just put up a contract here on GG for a programmer.

I get 1k bux for every employee i find.

#4 They can have some of my work. If I work another 90 hour week I am going to barf.

#5 I guess it comes down to my thinking the government is smoking something when they think that outsourced software engineers can simply be "re-educated" like outsourced laborers of the past. We're not talking about replacing six weeks of training here.

I'll bet that if it was lawyers or business executives being outsourced, there'd be some very swift action to stem the outflow of jobs!

Still... if demand for domestic software / IT professionals remains "high enough," I think it's a good thing... after all, these places are potentially "emerging markets" as well. Assuming we can get through all the rampant fraud and piracy in these areas so that we can actually market to them.

#6 I really don't care where work is outsourced. I'm tired of people whining because they lost their job to India, China, Russia or . Its just a matter of fact that everyone must learn to deal with. Its two sided: Companies outsourcing contracts in order to minimize costs is no more "evil" than a coder wanting to maximise their salary. If the work is comparible, why should the company be forced to pay more? Loyalty? To a coder that is likely to leave in favor of a higher salary elsewhere- yeah, thats gonna happen.

If a coder is really, truly badass and visionary, they simply cannot be replaced. Just like the art world, that badass is a very rare commodity and they will get their dues. Everyone else must deal with being mediocre, and like it, or else you don't have a job. Its that simple.

My Wife was a technical recruiter during the last decade. I saw the results of the DotCom boom- she found people in Israel, India, Russia, Germany, Canada, China, Japan...and brought them into the US on a work Visa. Most of the people recruited were within the US, though. DotComs were blowing money out their asses, literally.

Then the DotCom bust happened.

I find it really difficult to feel sorry for coders when the thousands I had contact with were raking in hundreds of thousands of dollars for a 3-6 month contract. I found that number to be absurd and a huge waste for the sake of "making the industry feel good about itself".

#7 I don't agree with your point on outsourcing Randall. Take a look at the big picture. The countries that are getting these jobs have a much lower standard of living. The workers are not getting benefits. If outsourcing continues to spread through American job markets how will American workers compete, unless we lower our own standard of living?

You make it sound as if American coders are not as talented as these coders overseas, when that is not the reason for outsourcing. Not only is the cost of living much less in these other countries, but their labor laws are far behind. Companies are not hiring these workers because they are more skilled, but because of lower salaries, no requirement to provide benefits, and for tax relief.

#8 And whats your point exactly?

I said nothing about US coders being less talented. But not everyone that can write a line of code is worth 100K+ a year. The software companies finally got wise and determined that "grunt work" can be done elsewhere for much cheaper. The face of the industry is far different than it was a 10 or 20 years ago, when everything was still being pioneered.

Now while the salaries are much lower in other countries, there are additional costs and pitfalls involved with outsourcing. This is true even when the work is outsourced WITHIN the US- it certainly doesn't get any easier with cultural, language and technical barriers. Eventually companies may decide that outsourcing to foreign countries is cost-prohibitive.

Now maybe you don't want to work for less. But I guarantee there are many coders out there that would be willing, simply because they genuinely like what they do and aren't worried about that 100K paycheck. Indies such as Garage Games really aren't affected all that much. In fact, I am pretty sure their salaries and overhead costs are surprisingly small compared to a similar company with a multimillion dollar budget. Waste not, want not.

#9 The problem isn't really that the programmers in Russia or China or what-have-you are being exploited because they don't have strong labor laws -- employed programmers tend not to be lower-class. The exploitation of foreign labor is an odius and all-too-common practice, but that's not what we're talking about here. Due to the fluidity of labor markets and the average productivity of workers in India et al vs. the average productivity of workers in America, a good Indian programmer is simply cheaper than a similarly-productive American programmer. Going with the Indian means more efficiency, which is why free trade is a positive-sum game.

Of course, just because free trade is A Good Thing(TM) doesn't mean the government shouldn't be finding trade-agnostic means for reducing unemployment. And I think that's something both the donkeys and the elephants can agree on.

#10 Well

I for one believe in free, global trade. Most other "democratic" countries do too.

So why is it bad to outsource a job that can be done just as well in India than here?

Its been done with most other products (cars, clothes, food, toys etc), so isn't this just purely programmers whining that their 100k salaries are a factor 10 higher than those of similar skill level in ?

I call it trade evolution, and there is nothing else to do about it than live with it and move on to more green pastures. Whining and implementing trade restrictions will not make the "problem" go away.

There will still be plenty of jobs around - just adapt.

*shrugs*

#11 I find it interesting this statement,"There will still be plenty of jobs around- just adapt".

My questions: Am I to 'adapt' every other year to increase the profit margin of someone's company?

Oh yes, let's all retrain, the current, 'Mantra' of the current US Government. Retrain for what? A job that will not support the Standard of Living that has been adopted here in the US?

I totally agree with this:"I'll bet that if it was lawyers or business executives being outsourced, there'd be some very swift action to stem the outflow of jobs!"

Keeping this line of thinking continuing...the President of the United States, IMHO, makes far too much money when coupled with the 'perks' associated with the position for the'returns'[jobs, security, etc...]provided, therefore; in the minds of some, this position[job, work, whatever you think it's called] would be best suited to be done by someone overseas making far less, no?; isn't that basically what this process's logical conclusion is? Isn't that what some are saying??? That if a cheaper solution can be found, do it??? That seems very shortsighted thinking....

I have no problems with anyone doing anything on their own[folks in other parts of the globe can start their own businesses, can't they? or is the 'duty' of American Companies to seed the world with profitable enterprises and jobs?]...just let's not hand folks stuf...when was the last time a foreign company came to your neighbor tossing jobs about, demonstrating great care in bringing your standard of living up???

:)

#12 @Rex - compared to the more corrupt dictatorships of the last 50 years or so, $200K a year for four years for being head of state for what is now probably the most powerful single country in the world is chump change compared to guys like Aristide, Duvalier, Saddam Hussein, and Idi Amin. :)

As far as the idea of "there will be new jobs, we just need adapt," an article in the February (I think) issued of "Wired" brings to light a good point. A New Jersey state senator who introduced, and successfully got passed, a law prohibiting state services from being outsourced was being given an overview of the evolution from an agrarian to an industrial economy, and again from industrial to a knowledge-based economy. The senator replied, "I'd like to know where you go from knowledge." The jobs have to come from somewhere. New businesses need to be created in order to create the new jobs. Unfortunately, because of the same dot-bomb that dropped and nuked the computer field, the venture capitalists are keeping away from the industry like it was Bikini Atoll. Because of the sluggish economy (yes, it's still sluggish despite assertations to the contrary), the VCs are also reluctant to invest in other businesses as well, though their investments are made with far less trepidation than they would with a tech company.

Jay is correct in that the clamoring for retraining is not nearly so simple as retraining somebody who had six weeks of training in the manufacturing industry, plus whatever experience they picked up on the job over that amount of time. But Randall is also correct in that the excesses of the Internet Boom ultimately led up to this point. Hard to make the payments on the Ferrari and the mansion when you're working for $30k a year.

Man of Ice is correct in that trade restrictions and protectionist laws are not going to make things better. But as others have stated, the companies are wriggling out of costs like high salaries, benefits, and labor laws while keeping their own salaries at levels that are truly extravagant.

The Japanese have a lovely saying. "Business is war." And right now, the varies corporate armies of America are off hiring mercenaries in bulk. However, as Machiavelli pointed out, the use of mercenaries only increases the power and prestige of the mercenaries, at the cost of the power and prestige of the country hiring the mercenaries.

All right. So, what can reasonably be done about the flood of outsourcing? Protectionist laws might save 10,000 jobs (which in a nation of 300 million isn't much) in the short term, but could cost 50,000 jobs later down the road. Without outside investment, the sluggish economy almost guarantees that personal assets will be going more towards staying alive than funding the new startups which could conceivably cut down the unemployment rolls even by a small percentage. About the only short term solution that I can think of is finding ways of reducing the cost of business inside the business. Finding new ways to save money that don't involve slashing the salaries of just the people on the floor. The management has to be willing to take the same sort of cuts, or deeper. Remember, Lee Iacocca told the UAW that he was going to work for Chrysler for the sum of $1 per year until the company got back on top. There needs to be more along the lines of innovation internally, figuring out new processes that actually ACCOMPLISH something rather than create more bureaucracy. And perhaps most importantly, there needs to be a better appreciation and a desire to keep the staff you've got instead of treating them like expendable assets. It sounds difficult, and I grant that there are no easy solutions. But there needs to be a fundamental shift in the way America does business. Until it makes that shift, we're going to see talk of protectionism and ever louder complaints of unemployed geeks as they fight with college kids for pizza delivery jobs.

#13

Quote:the President of the United States, IMHO, makes far too much money when coupled with the 'perks' associated with the position for the'returns'[jobs, security, etc...]provided, therefore; in the minds of some, this position[job, work, whatever you think it's called] would be best suited to be done by someone overseas making far less, no?;

I think THAT right there perfectly describes the whiners point of view. You all act like you are the "one and only President of the United States". Furthermore, if your position was based on an electorial college, I seriously doubt you would have a job. If you have what it takes to be the best of the best- then KUDOS to you. You really don't have much to worry about and your job won't be going overseas.

It seems to be the mediocre coders that are worrying about losing their job, and for good reason.

There are a massive number of artists jobs that are going overseas as well- If someone else wants to do my job for less, I say go for it. I don't fucking care. I'll just adapt and find something else to fill my days. But I sure as hell ain't gonna play the victim card.

#14

Quote:Remember, Lee Iacocca told the UAW that he was going to work for Chrysler for the sum of $1 per year until the company got back on top.

Iacocca is a true visionary, he had what it takes, and he knew it. People like that are extremely rare, to have such confidence in themselves. There are a few of those kinds of people around the Software Industry and I guarantee they are not the least bit concerned about their own Job Security. Its put up or shutup.

I also don't understand this whiners point of view for one reason: Why don't you start your own software company instead of being someones bitch day in and day out? The biggest reason I can think of is the fact that they simply don't have what it takes. Now its come to the point that the industry is Darwinian, and they know it. That scares the hell out of a lot of people.

I remember some discussions during the DotCom Boom- companies would spend thousands of dollars to fly and room a candidate for an INTERVIEW. If the candidate got the contract position, their salaries were often 10-20% higher than a regular employee. That created quite a stir and discontent amongst the employees, until it was explained that the contract worker gets no benefits, not stock options, no vestment. Any employee that wanted to become a temp was welcome.

Zero employees converted to becoming a temp. If you want your job, move to China.

#15 As always the reality of the situation is that it's both the governments responsibilty, and the individuals. They should be looking after the 'big picture' and you the 'small picture'. If I worked for a big corp doing overpaid IT work i'd probably be worried, and lets face it guys we know we had it good, and now the world's just catching up. As Randall is implying, if you're good, there will always be a place for you.

Guess what 'foriegners' aren't any less smart than we are. Their cost of living is cheaper because it's a lesser standard of living? And if it isn't then that's another 'problem' that needs to be addressed. People live to their means, and although I don't know the fear of having to support dependents, I do know the 'fear' of working for myself. Once you can step though the barrier from being a cog in a machine, to driving it... it's liberating.

Life isn't about accepting what you can get away with, it's about blazing your own path. And at the end of the day, isn't that what being 'independent' really is?

#16 ... for those of you who are calling all the people who lost their jobs to outsourcing whiners and the like...

How are you going to take it when they start outsourcing the REST of the jobs... as in, YOUR jobs. You might think its all peachy keen now, but cheap labor will eventually be the downfall of entrepeneurship and decent paying jobs. Dont you EVEN think that the big businesses will keep you on team when they can replace you with 2 more developers who will do the work at about half the price. And dont think you can compete with the big boys just because you are an indie developer. The fact is, indies do compete with the bigger companies... in the end, to the players, a game is a game whether its idie or not.

Dont condemn others when you havent had the opportunity to walk in their shoes.

#17 Leme just clarify that I am not against free trade, but I am for fair trade. I don't feel that America is handling our free trade agreements well. It just doesn't feel right to me when a company shuts down a factory in America and begins importing the same product from a foreign factory with poor or dangerous working conditions that employs children and pays poverty level wages, when an American company builds a factory in a foreign country in order to avoid adhering to federal pollution and labor laws, or lays off American workers and hires foreign workers to utilize tax loopholes. We have huge trade deficits with countries that have poor labor laws, pollution laws, and human rights records.

Also, I have nothing against the people who are getting these jobs. It's just sad that they are being taken advantage of by these companies who are not offering them basic priviledges like medical and retirement. I guess I'm just tired of the corporate mentality that every human is a dollar figure rather than a person that is a member of their community. That is why I left the company I was at, started my own entertainment company with friends, and am now back in school.

@Randall
The reason I felt you were saying foreign coders are getting jobs because they are better is because you said a coder needs to be truly badass and visionary to not be replaced and that if you are mediocre you have to deal with it. Since you feel that the American coders who are losing their jobs are just mediocre, it sounds as if you are implying that the coders overseas who are getting them are not.

#18 No, I think what he was saying was, if a company has to pay a mediocre coder $80k a year in the US, and can get a similar mediocre coder for only $40k a year overseas, why on earth would they hire the local at twice the cost?

It really is economic Darwinism at work. I had the unique opportunity to live in the community where the first Walmart in Vermont was placed (VT being the last state in the US to not have a Walmart). Locals argued long and loud for and against allowing Walmart to place a store here. I was originally against it - Walmart brings with it a large number of low to mediocre salaries, and tends to snuff out a lot of smaller local businesses in the process. In effect, smashing small, middle-class income businesses while returning mostly low-income jobs.

On further thought, I relaxed a bit. I came to the conclusion that this was an inevitable shift in the economy. Every once in a while, there are leap-sized changes in the way the economy works. Something new arrives (Walmart). Some businesses fold, unable to cope. New ones arise, to fill gaps in the new system. Things stabilize. Then the next thing to create instability and change occurs, and the process happens again.

The current tech industry is really no different. There was a big boom - too big, and the bubble burst. In ten years, we went from far too few tech trained people to far too many. Now those people are demanding salaries too high above what the actual demand is for their talents, and so the employers are turning to cheaper sources. Now what'll happen? Some of those people will retrain to new fields. Others will start new companies. I predict a burst in new small tech companies over the next half-decade, a virtual explosion of startups as people try to compete to put their skills to use. And within the next decade to 15 years, something else will roll along and stir things up again. What? I don't know, maybe private enterprise in space will pick up the tech slack or something.

Change always happens, always will. Adapt, improvise, overcome.

Or, you could always go work at Walmart. ;)

#19 Kevin, you are most definitely correct about the Internet Boom being too big. And you may be right about new tech companies starting up in the next few years. The hell of it is that most folks can't stop eating for a few years, or paying rent, or car insurance (especially in states where it's required), or utilities. Speaking from experience, there are folks who got laid off from Earthlink during their massive staff purges in late 2002 and early 2003 who STILL haven't been able to find steady work, even for less than what they were making before. For myself, I'm looking to get out of the tech field (and am ten grand in debt for my troubles so far), least until I can get my own little studio up and running. Here's hoping.

#20 I'm pretty much with Axel on this one. Things *WILL* level themselves out over time. After all, look at what happened in Japan over the last few decades. Once the place to outsource manufacturing, now they outsource to North and Central America. But that took 40 years.

Even now, with the weak U.S. dollar, things are balancing out a little bit. We export more when that happens (improving the economy) --- and outsourcing to other countries is less cost-effective than when the dollar is strong.

I also believe that there's some fundamental differences between outsourcing engineering jobs and manufacturing jobs. It can work, and it can work very well, but its not the panacea companies hope that it is. A few companies have brought jobs back onshore after initial failures, though in some of those cases I think they still could have made it work.

I would like to see some government intervention for the short term to ease the transition and raise the incentives (or reduce the disincentives) to hiring domestic --- and basically do more to perform "damage control" on the aftermath of the burst bubble. But long-term, globalization is the way to go.

And I also think I should avoid these political discussions, 'cause I know games much better than I know politics, law, and economics.