Navigating Turbulence: The Evolution of Co-Development in the Games Industry

The games industry has always relied on co-development companies to some extent, with these firms providing support to studios in need of specialist expertise. However, with the increasing scale and complexity of modern games, co-development has become more prominent than ever. According to Jake DiGennaro, chief revenue officer at Virtuos, there is a growing trend towards distributed development and external services. "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," he notes. Alejandro Garcia-Tunon, head of co-dev at Side, agrees that co-development remains a vital part of the game development ecosystem. "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," he explains. The type of work that co-development companies are involved in varies widely, from individual disciplines like art and animation to entire segments of a project. Ashley Liu, managing director of Keywords Studios' Create arm, notes that the balance of co-development work is shifting towards fully rounded content teams that can take on whole sections of games or even entire games. Despite the importance of co-development, the sector is not immune to the broader economic challenges facing the games industry. Publishers have become more conservative in funding projects, resulting in less work for co-development companies. However, Liu believes that the turbulence in the market presents opportunities for co-development firms to provide flexibility and support to partners. Garcia-Tunon adds that the co-dev space has historically grown year over year, but the uncertainty of the past couple of years has been challenging. "Our opportunities have come from our ability to quickly adapt to fit client demands," he says. Some co-development companies view themselves as indispensable, given the complexity and scale of modern games. DiGennaro believes that the industry needs a paradigm shift in how games are made, with co-development playing a critical role in increasing sustainability and reducing volatility. As the industry looks to the future, it's clear that co-development will continue to play a vital role. Modern video games are too big and require too much specialist expertise to be made by one company alone. "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 that despite the current challenges, the industry will continue to grow, with co-development firms working with partners to release more creative content and better experiences. The rise of new technologies, such as AI, may also impact how games are made, but Garcia-Tunon remains positive about the future of co-development. "As long as we have humans playing games, we'll need humans to develop and discuss what games should look like," he says.