Report: next-gen developers turn to outsourcing, immediate future is bleak

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Next-gen consolesA new report published by Screen Digest exposes the growing trend of outsourcing game development to low-cost specialists in Eastern Europe and South Asia. The report estimates that 60% of game developers currently outsource their projects and predicts that these companies will spend $1.1 billion on outsourcing this year, with that figure rising to $2.5 billion by 2010.

Outsourcing is typically used for art and animation, but the supply of capable providers is growing thin. According to the study, within the next few years, demand will exceed quality resources, forcing higher costs and fewer games. However, as new media companies gradually enter the market, the games industry will ultimately benefit.
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