Keywords Studio’s Andrew Day – “I love the industry and I don’t see it slowing down anytime soon.”

Finding someone with a well-informed view on the broader, evolving patterns of global games development isn’t easy. But Keywords Studios’ CEO Andrew Day has just such a view, one that comes from providing external development (XDev) services to largest publishers in the world for ten years. Following a rapid expansion over recent years, there are now 54 locations around the globe where we could meet on the Keywords chief’s home turf. On top of that, with over 7,500 staff now in the group, that makes him one of the largest employers of game development talent in the world, and a true XDev goliath.

For this meeting we plump for the mutually convenient Liquid Violet in Covent Garden, a voice production studio that has recently wrapped on work for a key Blizzard IP. Voice production is just one of the seven key segments that Keywords is active in, alongside working on art, localisation, QA, customer support, engineering and even developing entire titles on a work-for-hire basis. Supporting game developers is big business and it’s getting bigger all the time, due to widely-adopted changes in our approach to games development.

CHANGING GEARS

“I was travelling last week, and I took the opportunity to visit five major game development studios,” Day tells us, though he won’t reveal which ones exactly, as the work of firms such as Keywords remains highly secretive.

“And I spoke to the heads of all of those studios, and every single one, volunteered to me, that they’re all going to be making more games in the future with the same number of people. Next year, the year after that, and the year after… They said, obviously, we’re going to need more of your support to be able to do that.”

Day “thinks it makes sense” when we propose a future where game development studios become far smaller than is the norm today, with yet more services taken on by external developers, who are specialists in their respective fields. Though external doesn’t mean distant, as the working relationships between in-house and external will also shift.

“More and more integrated,” is how Day describes that relationship. “Three or four years ago in our offices, we would never have been asked to do hero assets, certainly not whole levels of the game. And all of that’s evolved quite quickly, so that it’s not untypical for us to be doing 80 per cent of the art on a single game in a highly integrated pipeline.

“It’s really interesting how quickly the industry has evolved. And I think that there is a degree of trust and a recognition that in order to build a game, you have to work in a distributed fashion. These days it’s almost impossible to assemble everything you need to make a game in one location.”

“We are now increasingly integrated in our clients’ core toolset. So we’ll be delivering the assets directly into their environment and will be testing them in that environment, whereas only a few years ago they were literally sending us an Excel list saying please go and make these characters or these weapons. We are given privileged access to our clients’ game engines, for doing co-development projects obviously, but increasingly, for things like art outsourcing and so on.”

THE DIFFERENCE ENGINE

We wonder if the increasing use of third-party engines, namely Unity and Unreal, by the industry as a whole has made it easier for companies such as Keywords to ply their trade. But Day is keen to press the point that it’s flexible on that front and will take on co-development work whatever the game’s underlying technology.

“On the one hand, having some sort of universal game engine or game engines can be quite helpful. But if you’ve got a game that differentiates itself, because it’s on a proprietary game engine, it’s worth sucking up the cost of maintaining that engine because it’s much more important to have that differentiation.”

“The world of game development and game publishing is so complex that what really matters is building a great game, and if you need to have your own toolset or have your own game engine, then that’s probably what you should do.”

Grouping around specific tech isn’t essential for more distributed development – and the greater efficiencies and outcomes that it can bring. But a greater aggregation of resources, first at the publisher level and then within external development specialists, looks to be an inevtiable, ongoing shift.

“We’re not going to be creating our own IP, we’re not going to be sinking $10m, $20m, $100m into a game, hoping that we’re going to make that money back. That’s very much the business of our clients.”

 

“We’re not going to be creating our own IP, we’re not going to be sinking $10m, $20m, $100m into a game, hoping that we’re going to make that money back. That’s very much the business of our clients.”

 

LUMP HAMMER

“Aggregation is super helpful for us and for the industry as a whole as well,” states Day. “And that’s because games are inherently quite lumpy. If you’re a publisher, you may well have many major releases you’re trying to get out the door for the Christmas rush. And so that drives your supply chain and you have these lumps that all come together. Managing your staffing and your resources in such a business is really hard.”

Day quickly shoots through decades of changing trends in game development. Starting with standalone developers “who dealt with lots of different suppliers and scrabbled for talent” who then had to downsize their teams at the end of each cycle and hope to hire them again when things picked up for the next project.

Following that, “publishers arrive and they’ve got ten studios within the publisher, they then extract a bunch of services to a central services function, which provides a degree of aggregation across, for instance, ten studios.

“Then you get Keywords coming along and we’re suddenly this uber central services operation that can help publishers – who even with ten studios don’t have this much aggregation.

“So the more we can aggregate, the more we can smooth it out, and the more on-demand the service becomes for our publishers and developers. So they can just come to us and at any point, turn it on, turn it off, pay only per hour, per day, with no cost of downtime or anything. So it really helps the industry, it helps us. And I think it’s the way external development will continue to grow.”

It’s certainly a historical narrative that rings true, and with big games becoming ever-more expensive and therefore risky, it makes sense for their creators to do anything they can to spread the load and not take on fixed costs.

And Keywords itself increasingly appreciates the benefits of that model, as it now undertakes entire games, producing titles using teams such as Brighton’s Electric Square, and utilising its own raft of services to support the development of those titles. Though it’s not about to shift into creating its own IP, Day explains.

“We do full game production, having been commissioned. We will happily pitch an idea. So when a customer comes to us, to use Microsoft as an example, who came to us and said ‘we think it would be kind of cool if we could create a different sort of experience based on the Forza IP’, and we went back with some ideas. They liked them, we did some prototyping and we ended up building Forza Street and then doing the live ops and stuff that goes on the back of it.

“So that sort of thing we’re very happy to do but what we’re not going to do is make our own games, and certainly not risk our own capital making our own games. We’re not going to be creating our own IP, we’re not going to be sinking $10m, $20m, $100m into a game, hoping that we’re going to make that money back. That’s very much the business of our clients.”

EXTERNAL FORCES

What we’re looking at here is a model where most, but not all, of the development talent will sit seperate to the IP holder. Something similar to, but also more nuanced  than, the traditional work-for-hire model.

And with an increasing amount of work done by such external development studios, it’s increasingly likely that development talent will find work at one. While it may sound like a step down to move away from where the IP is born, there are numerous advantages for both individuals and the industry in such a shift.

We could be looking at a future where, like the special effect houses of the film industry, developers would increasingly shift to specialist teams. And in that case, how would that affect the distribution of jobs and talent in our industry today?

Day points out that outsourced work can offer more variety: “If you work for a developer or publisher, whether it’s as a tester, a developer or as an artist, chances are you’re going to be working on the same IP year after year after year.” Something that’s been talked about a lot in recent year, with triple-A talent leaving such studios from tedium as much as burnout.

“Whereas, in an external development scenario, you’re probably seeing a much wider range of IP. That’s helpful for staff retention, staff satisfaction. And it’s also helpful in terms of raising the level of expertise.” And it’s easy to see how a co-development team dealing with multiple projects in a year will gain a better insight than a single-project team.

“It’s helpful just because of the sheer range of game engines, the range of monetization models, the different sort of features that we will be building for different people’s games, the technology challenges, the distribution platforms we’re dealing with, the tools we’re maintaining and developing. At a certain point, the market should expect companies like Keywords to have just as much expertise, if not even more, than they would have themselves,” Day predicts.

So is he at all worried that external development work might be perceived as being less valuable?

“I am quite happy for us to be the picks and shovels to the gold miners. And that work doesn’t have to be boring. We come up with some super interesting takes on shovels and picks,” he smiles.

“We develop some really interesting tech and we do great work and increasingly the sort of work that we’re doing is getting deeper and deeper with our clients.”

CREDIT CONTROL

There are many key parts of a truly satisfying job: the kind of work that you do, the environment that you do it in, and the renumeration you receive for it. But another key issue for many developers is the public recognition of their efforts. So are external developers getting the credit they deserve for the increasingly key work they put into so many projects?

“The vast majority of [our cleints] are very happy to credit the teams that worked on the games,” replies Day, who despite that statement, certainly sees it as an ongoing issue. “Whether it’s our testers, our artists, or our engineers. But then we’ve got others that almost want to pretend that they didn’t use external development at all.”

“If our clients only realised how motivating it is for our people, I don’t care about Keywords itself, but for our people to be credited on their games. It means that the next time a project from that client comes along, the guys want it, because they get recognised, whereas if it’s a client that won’t allow them in the credits…” He tails off politically, but the intention is clear.

Retention of talent is an issue for any company, but Keywords is not only retaining talent, it’s growing and not just through acquisitions.

“At the half year we’ve grown 17% organically. So 17% when you’re a 7,500 person company – yes, we’ve created a lot of jobs. I’m really proud of the fact that we’ve created these jobs. And a lot of those people go on to feed the industry as a whole, which we’re very proud of. So whenever we have people that either progress their careers within Keywords or go to our partners, and progress their careers there, hopefully they’ll come back to us at some point, or use some of our services!”

 

“It’s harder sometimes to invest and be able to say yes more often than you say no. But at the same time, it’s super important never to say yes and then not deliver, or deliver badly.”

 

ACQUIRING TARGET

Keywords has been notable in recent years for its near-endless string of acqusitions, something that Day is hoping to continue into the future, as he sees more value for both Keywords and the industry at large in further consolidation, though the nature of the targets has changed over the years.

“I spend a lot of time talking to our investors, and they say: ‘[Acquisitions] seem to have been a bit lighter this year, what’s happening? Are you running out of things to buy?’ and I reply: ‘Absolutely not.’

“In fact, the list is longer than ever. But what we are doing is being very specific about the sorts of businesses we buy. A few years ago we were buying localisation businesses, then we were buying testing businesses. Now we’re buying work-for-hire businesses.”

“We have a very deliberate acquisition strategy. And we’re basically trying to build each of our service lines into global businesses that have enough critical mass that they become the go-to provider for these services. So our clients think of Keywords first.

“And in order to do that, you have to have scale, you have to be able to accommodate a lot of client demands. In a service that’s matching demand, it’s quite easy just to say no to work when it comes in and a lot of people do. It’s harder sometimes to invest and be able to say yes more often than you say no. But at the same time, it’s super important never to say yes and then not deliver, or deliver badly.

CRUNCHY ROLES

That’s clearly a good sentiment, and one brings us on to a much-discussed issue of the last 12 months, that of crunch culture. It has long been a concern to us, that as the bigger developers get called out for poor working practices, the onus of hitting deadlines might simply move elsewhere. So is external development picking up the slack, and will Day say no to projects which look unachievable within the timeframe?

“Very often we will say no. We scope for [each project], and we don’t scope with crunch,” he states emphatically. “We will take work on if we can do it within a normal schedule. If the timetable compresses, we try and obviously put more resources on the project. And we have more resources,” he notes, one advantage of all that aggregation.

“Rather than crunch a smaller team, we try and make the team bigger so you can scale into the project. But we would rather say no to a client than say, ‘Yes, we’ll do it and our staff might not be able to go home for three weeks and they’ll live on pizza and sleep under their desk’. That’s not the Keywords way.

“I’m not going to say people don’t pull late shifts occasionally, because everybody at some point has worked to deliver. But no, we try not to do that, we would rather say no to the work.”

SERVICING AN AGING GENERATION

Keywords has a pretty good handle on the ups and downs of the games development business (not that there’s been very many downs, globally speaking, of late). Traditionally the end of one console cycle and the beginning of the next would provide at least at speedbump to that upward trend. Though Day is hopeful about the changeover:

“Fingers crossed, I think this console transition is going to be the smoothest yet.” Day says. “And very different to the ones we’ve seen before as well.”

“Compared to the last console cycle seven years ago where it was surprising how quickly, [platform holders and publishers] cut off support for the old platform. They just sort of stopped making games overnight for the platforms. Now it’s very much games as service, long tail content, for any major game.

“From our side, we follow the content. So what I’m seeing is that you’re going to have this content that is going to continue to run on the current generation of consoles, and will also run on the new console. And certainly our partners, our clients are not going to cut off support for stuff running on the existing console.”

“Outsourcing that live operations part in its entirety: introducing new features, introducing new characters, producing the videos to advertise that, doing the localization, the testing. That’s the sort of thing that I hope our clients will increasingly turn to us for. And I think we can do that efficiently. And it’s still very interesting work for us.

“I think they’re going to need help to maintain that, while trying to figure out how they’re going to take their IPs, whether it’s the existing game or whether it’s a new game, and design and features, richer graphics and audio, which are only going to be possible on the new console.”

“The mission, the strategy, everything that we always told people we would do is exactly what we’re doing. So we haven’t deviated one little iota from our strategy. That’s pretty unique in business.”

 

SERVING THE SERVERS

With the Google Stadia launch this very month, and xCloud, currently in preview, close behind, the new generation of console platforms will be larger than ever, and not simply boxes in living rooms, either. And more platforms creates yet another potential revenue stream for external development services.

“We’re lucky. I mean, we’re working for those [streaming] players directly but obviously, we’re also helping our partners in importing their games or where we’re developing games for them or with them, we’ll be building in the Stadia version, as part of the programme of delivery. It’s a very good position to be in, we sort of know what it takes.”

So has Keywords found the new streaming platforms to be a smooth transition too?

“I’d say it’s been fairly smooth for us. It’s funny, we’re a publicly traded company, so we have investors and they ask interesting questions like: ‘What do you have to do to prepare yourself for streaming platforms?’ or ‘Does that mean you have to go out and hire a completely different sort of resource type, because VR is coming around the corner?’

“And actually, we get taken into those spaces by our clients who are the content holders, but they’re also very often the platform holders. So somebody like Facebook with Oculus use our services, extensively.” In short with both platform and content providers as clients, Keywords should be up to speed before most when it comes to such shifts.

Over ten years, Day has built an enviable resource for the industry, one that provides many publishers with an essential service. Though amazingly, for a technology company, the overall strategy remains the same: “The mission, the strategy, everything that we always told people we would do is exactly what we’re doing. So we haven’t deviated one little iota from our strategy. That’s pretty unique in business.”

And as we began, that strategy has that provided Day with an enviable insight on the industry’s health and direction. He finishes by simply telling us that “I love the industry and I don’t see it slowing down anytime soon.” Good news for all there.