In one form or another, co-development companies have nearly always been around in the games industry.

For as long as people have been making games, there have been companies and developers who have made a living helping out other studios with their projects. For the most part, these companies had a low profile, sitting in the shadows of the developers they were working for; but with the growing scale of modern AAA projects, co-development firms are more visible than ever.

“There’s a growing awareness and desire among studios worldwide to leverage distributed development and external services,” says Jake DiGennaro, the chief revenue officer at Virtuos, which, along with Bethesda, co-developed the recently released The Elder Scrolls 4: Oblivion Remastered.

“Some reputable studios that have shipped their own IP are even embracing a co-op model, working on original IP development while offering co-development services to others. This approach has long been a tradition in Japan and is now becoming mainstream in North America and Europe.”

Alejandro Garcia-Tunon, the head of co-dev at Side, adds: “Co-development definitely remains a key part of the game development ecosystem – if anything, more so now than ever before. An increased number of development specialities, as well as scopes that are well beyond what the game industry has seen in the past, have increased costs.

“Having a full-time team of experts in each field you’d need to cover just wouldn’t make sense, so bringing in an expert is a great way for studios and publishers to tap into that talent without blowing up their budgets.”

Helping hand

The work that co-development companies are being brought in to assist with varies wildly. Sometimes it’s individual disciplines (art and animation are the most popular, according to research from the External Development Summit), but for others it is entire segments of a project.

“What we are finding is that the balance of the co-development work is changing from coding or feature-focused ‘team augmentation’ to fully rounded content teams that can take on a whole section of games or even whole games, like we did with the delivery of Lego Horizon Adventures,” explains Ashley Liu, the managing director of Keywords Studios’ Create arm.

Garcia-Tunon adds: “It runs the gamut from individual specialities, like AI, combat, physics, networking, and UI, to taking on entire chunks of a game like a full biome or boss. Sometimes we will cover different aspects even within a single project.

“When we worked on Silent Hill 2 Remake with Bloober Team, we worked on two boss fights in very different ways. For the fight with Eddie’s character, we were creative consultants, advising how we could lift the level from the previous version and make it more of a pivotal moment in the game. With Maria, the final boss fight, Bloober Team already had a vision in mind which we were able to help execute from a technical perspective.”

Despite co-development companies becoming a bigger part of the industry, the sector isn’t immune to the broader economics of the games market. For a variety of reasons, publishers have chosen to be more conservative in funding projects, and fewer games in development means less work for those whose role it is to help out.

“Demand grew very strongly over the past decade as games became larger and more complex – developers required additional support,” explains Liu.

“In the last 18 months, the volume of work reversed due to the overall contraction of the industry, but projects are starting to come back as the industry realises there’s been an overcorrection. Players expecting more engaging content will drive some renewed demand.”

The turbulence in the market, however, does present something of an opportunity for co-development companies. In an uncertain world where publishers are being more risk-averse, partners that provide a great deal of flexibility can be useful.

“There are opportunities for co-development, though they may not look like what we’ve seen in the past,” Liu says. “Specifically, as our clients restructure their businesses, there are now more opportunities for partners to fill resource gaps.

“There are also opportunities with clients that perhaps would like us to take over their older titles, especially as their best teams move on to new projects.”

“The headwinds that we face collectively as an industry have reached a breaking point where we can’t continue to make games the way we did 20 years ago”

Jake DiGennaro, Virtuos

Garcia-Tunon adds: “The last couple of years have been an anomaly, no question, but the uncertainty has been really challenging. The co-dev space has historically been growing year over year because the entire industry has been growing – more games equals more people needing help to make games. Our opportunities have come from our ability to quickly adapt to fit client demands.”

Some co-development companies view themselves as somewhat indispensable. The fact that games now require so many people, so many hours of work, and so many disciplines means that it is tough to make them without external help.

“The headwinds that we face collectively as an industry have reached a breaking point where we can’t continue to make games the way we did 20 years ago and expect not to run into a wall eventually,” DiGennaro believes. “With the rising costs of production, the economics of creating a successful game have become increasingly difficult.

“We have to acknowledge the fact that there’s something about the way we make games that needs a paradigm shift. While factors like discoverability, delivery, and distribution all play important roles, the process of how we build games is a critical part of the problem,” DiGennaro continues.

“More than seeing this as an opportunity for co-development companies, I think it’s an opportunity to reshape the collective mentality and methodologies of our industry towards increased sustainability and reduced volatility.”

As always, big games companies are very anxious about their IP and will often go to great lengths to protect it. Before its official reveal, screenshots and marketing materials for The Elder Scrolls 4: Oblivion Remastered were leaked from Virtuos’ backend on its WordPress.

“We have very strict processes and information controls at Side that have been honed over decades of work and thousands of games,” Garcia-Tunon says. “But our business relies on our reputation – successful projects build great long-term relationships and recommendations from previous partners are worth their weight in gold.”

Keywords’ Liu adds: “Ensuring there are no leaks has always been a challenge in game development, especially for projects that take years to complete with hundreds of people working on it at different times. As with any studio, team composition changes throughout the project lifecycle, making leakages an ongoing area to monitor.

“We can leverage experienced global IT and InfoSec departments to protect our client’s IP and data. They oversee hundreds of projects, thousands of configurations, and have successfully dealt with a vast number of incidents, allowing us to bring a level of protection surpassing many of our competitors,” Liu continues.

“In the unlikely event of a data breach, we inform the client first and foremost and together we find a way to resolve the situation. Sometimes, because we are open and honest, the clients trust us more.”

What comes next

Looking to the future, it’s clear that co-development isn’t going anywhere anytime soon. Modern video games are, by and large, too big and require too much specialist expertise to be made by one company, at least within a reasonable timeframe. Co-dev firms are here to stay.

“Fundamentally, I think distributed co-development is how games will be – and should be – built moving forward,” DiGennaro says. “It has the potential to make a profound impact in the sustainability of this industry.”

Liu adds: “Despite the layoffs and project cancellations, this industry will grow. We’ll work with partners to release more creative content and better experiences, leveraging new technology to create games and mechanics that have never been seen before. We’ll reach new artistic heights that truly engage players.”

But, as with the rest of the industry, change may be afoot in the near future. New technologies do look like they could have an impact on how games are made.

“Workflows are already evolving to include developing technologies like AI,” Garcia-Tunon admits.

“That said, my outlook is positive – as long as we have humans playing games, we’ll need humans to develop and discuss what games should look like.”