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

The games industry has undergone significant transformations over the years, with co-development companies playing an increasingly vital role. These firms have been instrumental in supporting studios with their projects, and their services are now more in demand than ever. According to Jake DiGennaro, chief revenue officer at Virtuos, there is a growing awareness among studios to leverage distributed development and external services. This approach has been a tradition in Japan and is now becoming mainstream in North America and Europe. Alejandro Garcia-Tunon, head of co-dev at Side, agrees that co-development remains a key part of the game development ecosystem, particularly with the rising costs of production and the need for specialized expertise. The work that co-development companies undertake 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 from coding or feature-focused 'team augmentation' to fully rounded content teams that can take on whole sections of games or even entire games. Despite the challenges posed by the current market, co-development companies are adapting to the changing landscape. Liu believes that the turbulence in the market presents opportunities for co-development firms to provide flexibility and support to publishers. Garcia-Tunon adds that the co-dev space has historically been growing year over year, and their ability to quickly adapt to client demands has been crucial in navigating the uncertainty. Some co-development companies view themselves as indispensable, given the complexity and scale of modern games. DiGennaro believes that the headwinds facing the industry have reached a breaking point, and a paradigm shift is needed to ensure sustainability and reduced volatility. The importance of protecting IP is also a major concern for co-development companies, with Garcia-Tunon emphasizing the need for strict processes and information controls. Looking to the future, it is clear that co-development will continue to play a vital role in the games industry. DiGennaro believes that distributed co-development is the future of game development, with the potential to make a profound impact on the industry's sustainability. Liu adds that despite the current challenges, the industry will grow, and co-development firms will work with partners to release more creative content and better experiences, leveraging new technology to create innovative games and mechanics.