Recently I had the opportunity to visit China. My primary purpose was to understand the outsource market potential and get feedback from likeminded individuals at the Game Developer’s Conference in Shanghai. I also visited our partners in the Beijing studio. It was a most educational trip, and I’m happy to share my thoughts and pictures.

To the westerners (like myself) who haven’t been to China before, witnessing Shanghai leaves you a bit punch drunk, even if you’ve seen Blade Runner. I thought I was going to a communist country, but it appeared to be the work of capitalists — maybe more than any US city I’ve been to. That is, capitalists on Red Bull maybe, and riding a magic dragon. There’s so much new construction that it gives a singular message of rapid but designed progress. Design really matters here more, and the place matters to the design. A set of apartment buildings, which in most places would be rectangles extruded fifty stories, in Shanghai have little interesting twists to the design- making them fit in the place somehow; differing number of floors, the roofs would curve apart or together, all of it making sense to where it was. From what I understand, a lot of the design (innovation) is western, but the canvas is the skyline of Shanghai.

Even though it seemed a new skyscraper went up overnight when I slept, it was another interestingly designed skyscraper that looked good in the space it was designed for. They don’t stop building. Gigantic doesn’t cover the vastness of this city. You can’t capture it in pictures- it just keeps going up and out in every direction. Eighteen million people is what I gather from asking around, but nobody knows the population because there are so many undocumented people. That part, the ‘undocumented people’, didn’t leave my mind the whole time I was there.

Shanghai deserves more than one time zone, and certainly China deserves a dozen or so- but there’s only one in all of China. Beijing time. It is very intentional- Beijing is in every way the center of China, and therefore the world in China’s eyes.

Culture

I arrogantly assumed that an American could at least get by in most places speaking only English, but I recall the first night of Shanghai, with two NCSoft colleagues who speak fluent Korean and English- we couldn’t order rice, or water. It was humiliating and absurd at first, but of course they don’t know English! Why would they? It wasn’t long ago the doors really began to open up, which explained why nobody looked like me on the streets. Nobody. New York is a melting pot, Shanghai and Beijing are.. well, not as much. The second day brought relief, when our translator arrived. She spoke fluent Chinese and English (She learned in England), which made the rest of our time in Shanghai possible.

The Conference

GDC China! Even though it started out small, the organizers of the conference did an excellent job. The conference attendees were around 30% westerners, most of whom were executives investigating business opportunities, outsourcing, etc. The Chinese attendees were either execs from the big online companies- Netease, Shanda, and 9you, or fairly mid to low level workers eager to attend this kind of conference. (one that doesn’t require a visa and a lot of money for starters). From what I gather, the speakers were a good draw, although there were some surprises; for example, Midway wasn’t as well known as you would expect. There were a lot of technical art tracks I poked my head in- they filled the halls for these- talks about shaders and dx10 from nvidia, advanced 3ds max, etc. On the first day (Monday) the talks focused mostly on mobile gaming, and I had meetings all over Shanghai with several outsource companies. The landscape in China for outsourcing has dramatically changed just in the last couple years here.

Outsourcing in China TodayI had the opportunity to discuss the topic of outsourcing with several different people, representing several different angles. I talked candidly with the western show organizers (CMP), several ex pats opening up shop in China, Chinese starting their own outsource companies, Chinese artists working at these studios, and some westerners- veteran colleagues responsible for managing relationships between American game studios and outsource studios in China. After these discussions, here are the things I learned, found studios had in common, and the main factors in choosing an outsourcing studio to work with.

CostYes, it still makes economic sense to outsource art in China, but the returns are shrinking in some ways. For example, the sheer value of money- RMB vs USD is trending in favor of the RMB, something consistent over the last few years. Because of competition and increasing costs of studios located in the major coastal cities and Beijing, the cost has become prohibitive to the ‘guys getting together to start a studio’. It means big money commitment, which necessitates long term commitments from clients, which as we know is impossible without some prior high level clients, or some serious vouching.. I believe that’s why there’s a sea of outsource ‘studios’ out there, but only a few who will meet with you and show you the studio, talk about the money, and expect longer term commitments. For anyone making a mid to large scale game, this is who you’ll be dealing with.

Consistency of WorkA given, and a problem I hear the most. Some companies are said to start you out with the best artists, but then switch out with some new guy to fill seats. This can’t last, and will certainly not get companies good word of mouth. The problem is everyone wants to keep this information to themselves, so as far as I know, there isn’t an international better business bureau or rating system for customer satisfaction. Also in some cases it depends on your studios status. They really want to please the logos that look good on their ‘recent clients’ page, but unfortunately no matter who you are, you hear stories of ‘bait and switch’ when it comes to consistent quality. This is where the contract needs to be specific, and where the problems need to be identified and called out immediately. It will get expensive quickly to get work you have to pay twice to get done right.

CommunicationAssuming any place could potentially get good artists and consistent results, communication is the key to longevity. This requires trust. Trust is challenging when there are so many language and cultural barriers. To overcome this, you need to meet the person you will be doing business with face to face. The successful studios thus far tend to have an ex pat or at least fluent English speaking main contact. This is really the only way to have any kind of confidence. It is potentially a luxury that can’t be had, but setting up face to face meetings at gdc was a perfect way to do it for me. We have an exhaustive ‘request for information’ document, which I’m sure feels like applying for a mortgage, but it’s the next best thing to being there in the room, and asks difficult questions that need to be answered. Visiting the studio also gives a picture of where the motivation is- generating new business, keeping a few long term people happy, or trying to stay afloat with too many short term contracts, etc.

Ability to scale produciton up (and down)

This should read “ability to scale up predictably with consistent results, and with as little notice as possible.” But that’s a client talking. For the outsourcing company this means they have to develop a sustainable process of recruiting and training. When I say sustainable, I mean something better than relying on job boards or a single stream of talent. A real plan for recruiting and training is necessary.

Recruiting and trainingEspecially for a smaller, emerging outsource company (almost all of them), recruiting artists in China is much more difficult than it first sounds. There are few high quality schools. Some studios are actually getting exclusive “right of first refusal”-like relationships with prestigious art academies, and some studios work directly with academies to handle the low-security risk jobs. To be clear, this means they get paid by students to do work which they are already getting paid to do themselves. Once the artists graduate, they have a place to work. A larger scale method several studios are attempting is to have ‘schools’ inside their own office space, and to have a complete curriculum of courses from beginner to advanced, and pipeline specific specialization. The end result is they have artists who have an exact skill set and quality level. This means the studio can design the course themselves, allowing continual updates in techniques that apply directly to the work they bill clients for. This all of course requires serious investment in space, equipment, and time, but some feel it is the best long term solution, and the only sustainable and scalable business solution.

Retention and the effects of competition

Assume you now have an excellent team of artists with different levels of skill and specialization. The cost is great in time- but money was saved in space and salary (let’s assume). This is good for bottom line, of course, but now that competition is part of the landscape, demand for talent goes up, making these well trained artists even more valuable, and more of a flight risk. They will want a better salary and better location. Competing studios who want to avoid the ‘time’ part of the equation are offering double salaries in order to leave in some cases. All of this is good for Chinese artists, but it begins to reduce the savings of outsourcing, and increases turnover. China is no longer a ripe, untapped pool of talent, even considering what seems like an eternal supply of potential workers. Also, China is only going to support business relationships like this which benefit China.

SecurityVery important, of course, and after a certain level of redundant (insert buzzword) backups and no usb drives, no internet, different physical location, etc. but all of that goes back to communication and trust. If the people are happy there, they are less likely to do bad things with your IP or tech. Even with probably the very latest in security, any of the places I visited could be breached with proper motivation. This is not a challenge, just that whenever people are involved, you do your best. I’ll pass all the security specs to our IT experts and let them be the judge. All of the major studios I visited ‘appeared’ to have ample security. Some made you ‘feel’ better than others. The other thing to make sure is that all the work is done in the building by full time artists. This is actually fairly rare, but important.

In Summary

I learned a great deal about China in particular, and feel we made a well timed visit to get started with the outsourcing studios we’ll be working with. The fundamental questions have resolved and it is now a matter of putting our combined work capacities together, and figuring out which/how many of the other outsource studios we should get to do the rest of the work. I hope you have found this information useful as well.

• Jake Rodgers, Vice President, Art Director

This entry was posted on Tuesday, October 30th, 2007 at 1:39 am and is filed under Art Team Blogs, Developer Blogs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.