I had an interesting conversation with a studio head recently about their first attempt at external development back in 2011: "We spent three months documenting every single detail. The specs for a single character were 15 pages long. And you know what? The result still wasn't quite right."
Their story perfectly captures how most of us used to think about outsourcing: document everything, minimize communication, and hope for the best. It was the era of "throw it over the ocean and see what comes back" development, where cost-cutting was the main goal and quality expectations were... well, let's say modest.
Only a decade later and things are really different. Driven by the macro changes discussed in last week’s newsletter, today nearly all successful studios aren't just outsourcing work—they're building development partnerships that have fundamentally reshaped how games are made.
So what does this mean for your studio? And how should you take full advantage of the ever-expanding value of the games services ecosystem? Let’s dive into what a modern, strategic approach to building game teams looks like.
Rethinking How We Build Studios
In the era of fully remote work, what's the difference between an internal employee and an integrated contractor?
The honest answer: not as much as you might think. One is a full-time employee working remotely, while the other is…not a full-time employee working remotely. Both are accessing your systems from afar, both are communicating through the same tools, both are part of your daily standups and project planning.
In a remote-first world, where the difference between an employee and a contractor often boils down to a boring HR classification, studios need to rethink how they approach hiring. Instead of defaulting to "we need someone—let’s post a job," it’s worth taking a step back to ask:
- Is this a project-based need, or a capability we’re looking to build and strengthen over time?
- Does this role align with our long-term vision, or is it filling a short-term gap?
- What level of uncertainty do we have / how much flexibility do we need?
Now, I'm not suggesting you need to have an existential debate every time a need pops up. But having some solid principles in place to guide these decisions? That's just smart business.
Different Studios, Different Needs
Of course, every studio and project is different. And as a result, the tradeoffs of hiring internal vs external vary. After years of helping teams build these relationships, I've noticed some patterns in what different types of studios prioritize when choosing external partners. Let's use the traditional archetypes of AAA and smaller independent teams to illustrate what I mean:
AAA Studios Look For:
✅ High-Quality & Consistency – If you can't nail it, they'll find someone who can. Period.
✅ Scalability & Reliability – They need partners who can flex up or down without drama.
✅ Pipeline & Process Fit – Partners need to slot right into their existing systems (think structured pipelines and custom tooling).
✅ Security & Compliance – When you're handling major IP, this stuff matters. A lot.
AA / Independent Studios Prioritize:
✅ Smart Value – Not necessarily the cheapest option, but the best bang for their buck.
✅ True Collaboration – They want partners who bring ideas and feedback to the table, not just execute orders.
✅ Flexibility – Plans change, scope shifts, game vision evolves—they need partners who can roll with it.
✅ Quick Movement – Smaller teams move fast and need partners who can keep up without getting bogged down in process.
And it’s not only studio size that matters. From the type of game you’re making, to which stage of production you’re in, to the overall studio culture you want to create; each of these factors should be considered when coming up with a resourcing strategy for your project.
Developing an External Strategy That Works for You
Every studio will have its own comfort level with risk and its own unique vision. But teams that really understand their strengths and use external development strategically will set themselves apart in an increasingly competitive landscape.
Here are a few guidelines to get you started:
- Know What Makes You Special
Too many studios outsource whatever feels hard in the moment instead of being strategic about it. If you don't know what your studio is going to be known for, you risk becoming more of a project manager than a creative force.
Be intentional about your strengths. The smaller your studio, the shorter the list. If your combat design, storytelling, or technical innovation is what sets you apart—keep that in-house and invest in it. Your external partners should amplify and complete your vision, not define it.
- Don't Outsource Responsibility for Success
This is a big one, and I've seen it trip up a lot of teams (including ones I've worked with). It's especially common with new platforms—companies take this "if we build it they will come" approach, waiting for external teams or the community to create that killer app they need.
Spoiler alert: That killer app never materializes.
Don’t make this mistake. As a product and games leader, you should know your audience better than anyone. YOU are the one who needs to make the magic happen…magic being the result of relentless iterations, tough decisions, and a clear vision. Not an out-of-nowhere revolution.
- The Right Risks to Take
Every company should acknowledge and update their biggest risks at all times. For new studios, the biggest risk is most likely never shipping at all. Established studios with recurring revenue, on the other hand, have a kaleidoscope of challenges from quality control to cost creep.
Sometimes accelerating your time to market by using off the shelf solutions will give you the best chance for success. Other times, building and maintaining internal capabilities for your most strategic work—i.e. core design or key technology— will put you in a much stronger position.
Leverage external partnerships to make your company more resilient, not more dependent.
- Avoid Using External Teams as a Band-Aid
If you're bringing in external teams just because hiring is hard or resourcing falls short, you're solving the wrong problem. External partnerships should be a strategic choice, not a panic button when recruiting falls behind.
Plus, if you hand off key responsibilities that your team was excited to grow into, you're creating a whole new problem. I've seen this lead to frustrated employees and eventually, talent walking out the door.
The more clearly you can articulate your ExDev strategy and faithfully stick to the plan, the stronger your company and overall culture will be as a result.
- Treat External Development as its own capability
There’s a big difference between studios that excel at external development and those that struggle with it. And like any other core function—whether it’s engineering, art, or production—being proficient at external development takes time and practice.
Start small, and let partnerships and trust build over time. From process development to identifying the right supporting tools to choosing the right partners, every aspect of external development requires careful refinement.
This is exactly why I founded CDR—to help studios operate at their best and build successful partnerships from day one. Whether you're just starting to explore external development or looking to improve existing relationships, having an experienced partner in your corner ensures fewer missteps, stronger collaborations, and more rapid results for your projects. After all, successful studios don't just hire external teams and hope for the best—they actively invest in and improve the systems and relationships that allow partnerships to thrive.
Staying Smart with ExDev
This evolution in game development isn't just about finding new ways to get work done—it's about reimagining what a modern studio can be. The most successful teams I work with are building more sustainable, adaptable, and creative companies with contractors and external developers of all types. They're proving that with the right partnerships and strategies, you can do more than just ship games—you can build something that lasts.
I'd love to hear your thoughts on this. How has your studio approached these decisions? Drop me a line—I'm always excited to learn from others' experiences.
