GDC Side Quest - Exploring co-development opportunities with Sam Carlisle

XDS Spark co-founder Sam Carlisle and GDC Festival of Gaming content marketing manager Beth Elderkin discuss the evolving world of co-development.

Game productions are growing larger and larger, and business leaders are looking everywhere for solutions on how to ship great games without blowing up budgets. One solution lies in the world of co-development and external development—the practice of hiring outside studios to work in tandem with the main game development team to pick up tasks big and small, sometimes taking ownership over entire segments of a game.

But picking an external partner is no easy feat. Game development is still a creative, iterative process, and treating co-dev and ex-dev colleagues as glorified contractors can lead to disaster.

Microsoft CEO says Xbox is simply 'streamlining' after cutting over 5,750 jobs in three years

The company has also divested or shuttered a number of key studios such as Double Fine, Compulsion, Tango Gameworks, and more in recent years.

Xbox has made five rounds of mass layoffs since acquiring Activision Blizzard for $68.7 billion October 2023—but it seems that Microsoft CEO Satya Nadella feels that's simply all part of a natural "streamlining" process.

The latest cuts were confirmed in July 2026 and will result in 3,200 people being jettisoned from Xbox Game Studios by the end of the current fiscal year. That reduction includes the divestment of notable studios such as Compulsion Games, Double Fine, and Undead Labs. Others like Arkane and Ninja Theory are also facing the very real threat of closure.