Games companies turn to outsourcers for low-cost workers

The United States, and most especially California, has birthed dozens of dominant tech companies, including games companies that generate jobs, taxes (at least those they can't dodge) and the soft power of global cultural dominance.

But if you're the sort of person who takes a pride in such things — who prefers to buy American goods — you might be in for a surprise. Significant parts of American games are built abroad, at low-cost studios specifically designed to handle outsourced development work.

At the DICE game industry convention recently, I grabbed a coffee with Alexander Fernandez, CEO of Malaysia-based Streamline Studios. His company has worked on more than 250 video games, including games in the Gears of War series, BioShock Infinite, Killer Instinct, Unreal Tournament 3 and Star Citizen. He also services Japanese games like Final Fantasy 15 and Street Fighter 5.

Some of my questions to Fernandez make him furrow his brow. I'm influenced by horror stories of workers in Asian countries, making the goods we consume under appalling conditions. Fernandez sighs.

"It's not slave labor," he says. "It's not kids with no hands. I mean we're not doing that."

He says a developer in Kuala Lumpur might make maybe $12,000 to $20,000 a year less than a developer in the United States. This surprises me. I expect a much larger differential. "When you start adding up the number of people you need to make a big game, it adds up real fast," he says.

Big publishers often prefer to outsource work, because of the cost-saving and because it means they can avoid hiring full-time staff. They often approach overseas contract houses late in a production schedule, when it's clear they are going to miss a deadline.

The cost of living in Kuala Lumpur is cheaper than in the United States, especially compared with notoriously expensive towns like San Francisco. Should game developers in the U.S. maybe think about moving to Malaysia to look for work?

"I would encourage everyone in any walk of life to move and see another part of the world," he says. "I see developers and designers in the U.S. getting hired and fired year after year. You get fed up. How can you have a career if you never get the opportunity to grow? So yeah, you have to get up and go to where opportunity is."

Streamline is an American company that mostly works out of Malaysia. Fernandez acknowledges that countries like Malaysia do not have a deep pool of people with years of development experience. "When we moved to Malaysia, the experience was missing. But the talent was there and so was the ambition. Through mentorship and practical training, you can get the experience."

He argues that his staff of more than 200 people may enjoy better conditions than many American workers. "We don't like to do crunch. It's totally avoidable through proper planning, realistic schedules and proper leadership." I try to press the point. He sighs again and says that, no, people aren't jumping off the roof of the factory.

So here's my next question. He looks at me like he knows what's coming. I ask him, in a roundabout way, if his company is basically churning out art assets like crates and stuff. By this point he's almost pinching the bridge of his nose.

"What you just expressed is unfortunately a stigma that people have. They think that's all these external development studios can do is the [low level] work."

His company does create art assets, including character models. They also do rigging, programming, design, engine work and rendering. He's currently expanding into creating original IP.

Finally, I ask him about the political situation in the United States. With xenophobia on the rise and President Trump posturing as a staunch defender of American jobs, is there a danger of a backlash against games made by foreign workers?

"I guess, theoretically there could be a backlash against anything made overseas. But the moment that happens then our industry has a bigger problem. We are a meritocracy that believes in the idea that it's not where you're from that matters, it's what you can do."