How co-development companies are navigating a turbulent industry in 2025 GamesIndustry.biz catches up with some of the top companies working in the co-dev space to see how they are faring given current industry headwinds Image credit: Bethesda Softworks Feature by Alex Calvin Contributor Published on May 15, 2025 In one form or another, co-development companies have nearly always been around in the games industry. For as long as people have been making games, there have been companies and developers who have made a living helping out other studios with their projects. For the most part, these companies had a low profile, sitting in the shadows of the developers they were working for; but with the growing scale of modern AAA projects, co-development firms are more visible than ever. "There's a growing awareness and desire among studios worldwide to leverage distributed development and external services," says Jake DiGennaro, the chief revenue officer at Virtuos, which, along with Bethesda, co-developed the recently released The Elder Scrolls 4: Oblivion Remastered. "Some reputable studios that have shipped their own IP are even embracing a co-op model, working on original IP development while offering co-development services to others. This approach has long been a tradition in Japan and is now becoming mainstream in North America and Europe." Alejandro Garcia-Tunon, the head of co-dev at Side, adds: "Co-development definitely remains a key part of the game development ecosystem – if anything, more so now than ever before. An increased number of development specialities, as well as scopes that are well beyond what the game industry has seen in the past, have increased costs. "Having a full-time team of experts in each field you'd need to cover just wouldn't make sense, so bringing in an expert is a great way for studios and publishers to tap into that talent without blowing up their budgets." Helping hand The work that co-development companies are being brought in to assist with varies wildly. Sometimes it's individual disciplines (art and animation are the most popular, according to research from the External Development Summit), but for others it is entire segments of a project. "What we are finding is that the balance of the co-development work is changing from coding or feature-focused 'team augmentation' to fully rounded content teams that can take on a whole section of games or even whole games, like we did with the delivery of Lego Horizon Adventures," explains Ashley Liu, the managing director of Keywords Studios' Create arm. Garcia-Tunon adds: "It runs the gamut from individual specialities, like AI, combat, physics, networking, and UI, to taking on entire chunks of a game like a full biome or boss. Sometimes we will cover different aspects even within a single project. Image credit: Konami "When we worked on Silent Hill 2 Remake with Bloober Team, we worked on two boss fights in very different ways. For the fight with Eddie's character, we were creative consultants, advising how we could lift the level from the previous version and make it more of a pivotal moment in the game. With Maria, the final boss fight, Bloober Team already had a vision in mind which we were able to help execute from a technical perspective." Despite co-development companies becoming a bigger part of the industry, the sector isn't immune to the broader economics of the games market. For a variety of reasons, publishers have chosen to be more conservative in funding projects, and fewer games in development means less work for those whose role it is to help out. "Demand grew very strongly over the past decade as games became larger and more complex – developers required additional support," explains Liu. "In the last 18 months, the volume of work reversed due to the overall contraction of the industry, but projects are starting to come back as the industry realises there's been an overcorrection. Players expecting more engaging content will drive some renewed demand." The turbulence in the market, however, does present something of an opportunity for co-development companies. In an uncertain world where publishers are being more risk-averse, partners that provide a great deal of flexibility can be useful. "There are opportunities for co-development, though they may not look like what we've seen in the past," Liu says. "Specifically, as our clients restructure their businesses, there are now more opportunities for partners to fill resource gaps. "There are also opportunities with clients that perhaps would like us to take over their older titles, especially as their best teams move on to new projects." "The headwinds that we face collectively as an industry have reached a breaking point where we can't continue to make games the way we did 20 years ago" Jake DiGennaro, Virtuos Garcia-Tunon adds: "The last couple of years have been an anomaly, no question, but the uncertainty has been really challenging. The co-dev space has historically been growing year over year because the entire industry has been growing – more games equals more people needing help to make games. Our opportunities have come from our ability to quickly adapt to fit client demands." Some co-development companies view themselves as somewhat indispensable. The fact that games now require so many people, so many hours of work, and so many disciplines means that it is tough to make them without external help. "The headwinds that we face collectively as an industry have reached a breaking point where we can't continue to make games the way we did 20 years ago and expect not to run into a wall eventually," DiGennaro believes. "With the rising costs of production, the economics of creating a successful game have become increasingly difficult. "We have to acknowledge the fact that there's something about the way we make games that needs a paradigm shift. While factors like discoverability, delivery, and distribution all play important roles, the process of how we build games is a critical part of the problem," DiGennaro continues. "More than seeing this as an opportunity for co-development companies, I think it's an opportunity to reshape the collective mentality and methodologies of our industry towards increased sustainability and reduced volatility." As always, big games companies are very anxious about their IP and will often go to great lengths to protect it. Before its official reveal, screenshots and marketing materials for The Elder Scrolls 4: Oblivion Remastered were leaked from Virtuos' backend on its Wordpress. "We have very strict processes and information controls at Side that have been honed over decades of work and thousands of games," Garcia-Tunon says. "But our business relies on our reputation – successful projects build great long-term relationships and recommendations from previous partners are worth their weight in gold." Image credit: Keywords Keywords' Liu adds: "Ensuring there are no leaks has always been a challenge in game development, especially for projects that take years to complete with hundreds of people working on it at different times. As with any studio, team composition changes throughout the project lifecycle, making leakages an ongoing area to monitor. "We can leverage experienced global IT and InfoSec departments to protect our client's IP and data. They oversee hundreds of projects, thousands of configurations, and have successfully dealt with a vast number of incidents, allowing us to bring a level of protection surpassing many of our competitors," Liu continues. "In the unlikely event of a data breach, we inform the client first and foremost and together we find a way to resolve the situation. Sometimes, because we are open and honest, the clients trust us more." What comes next Looking to the future, it's clear that co-development isn't going anywhere anytime soon. Modern video games are, by and large, too big and require too much specialist expertise to be made by one company, at least within a reasonable timeframe. Co-dev firms are here to stay. "Fundamentally, I think distributed co-development is how games will be – and should be – built moving forward," DiGennaro says. "It has the potential to make a profound impact in the sustainability of this industry." Liu adds: "Despite the layoffs and project cancellations, this industry will grow. We'll work with partners to release more creative content and better experiences, leveraging new technology to create games and mechanics that have never been seen before. We'll reach new artistic heights that truly engage players." But, as with the rest of the industry, change may be afoot in the near future. New technologies do look like they could have an impact on how games are made. "Workflows are already evolving to include developing technologies like AI," Garcia-Tunon admits. "That said, my outlook is positive – as long as we have humans playing games, we'll need humans to develop and discuss what games should look like."

Heneghan Peng's University of Greenwich building Source:&nbsp Hufton + Crow EXCLUSIVE: Lecturers at Greenwich University’s architecture school have been left ‘angry and disillusioned’ by plans for a restructure that put over 300 university staff at risk, including dozens in the department The south-east London university informed staff last month of its plans to make 319 redundancies, including all casual staff known as hourly-paid lecturers (HPLs) within the Faculty of Liberal Arts and Sciences (FLAS) and Greenwich Business School (GBS). A consultation document for FLAS, sent out to staff last month and seen by the AJ, reveals the university intends to replace 151 HPLs with just 50 academic teaching posts, which would mainly be part-time positions, equating to 17 full-time equivalents. It also wants to set up a ‘pool’ of associate academic staff for ad-hoc cover, which it is understood will work on zero-hour contracts.Advertisement The School of Design, which includes the architecture department and is based at a Heneghan Peng-designed building in Greenwich town centre, is one of the worst-hit departments. Within architecture, the AJ understands 50 of the 70 teaching staff could be made redundant, with 20 then hired back. It is believed that 31 full-time academics will also be made redundant in the Faculty of Engineering and Science. According to the consultation document, the faculty’s rationale is to claw back staffing costs, with the university forecasting it will spend £1.7 million on HLPs in 2024/2025. It says it needs to reduce staff costs by 4 per cent (around £800,000) to operate within budget. ‘Staff cost savings measures need to be fully implemented no later than 31 August 2025 to have as close to full-year effect,’ the consultation states. However the restructure of FLAS, which since last year has been under the leadership of pro vice-chancellor and executive dean professor Natasha Vall, is facing opposition from lecturers, students and the University and College Union (UCU).Advertisement A letter heavily criticising the plans, and seen by the AJ, was sent to senior management last week and signed by more than 30 teaching staff in the architecture school. Describing the plans as ‘hugely damaging to the faculty and its students’, the letter includes calculations that suggest the proposals will reduce student teaching time by 40 per cent. It also warns that the reduction in staff-to-student ratios could mean the courses could come under scrutiny from accrediting bodies such as the RIBA and the Architects’ Registration Board (ARB). ‘There is a real risk that affected courses will lose their accredited status or be put on to special measures,’ it said. The lecturers’ letter also raises concerns that the ‘associate academic’ positions could essentially become zero-hour contracts at a lower remuneration, classifying staff as workers rather than employees and removing basic rights such as sick pay and maternity pay. It adds that staff are ‘incredibly angry and disillusioned’ by the way the proposals have been presented, and especially that the redundancy plans were announced during the Easter break, after many HPLs’ teaching involvement for the year had ended. This meant that any HPLs who wanted to take part in the consultation had to do so at a time they were not employed by the university. Explaining the rationale for axing HPLs, the consultation said that while the casual lecturers had played an ‘important role’ in providing specialist teaching and cover for sickness absence, they had also been used to ‘meet core teaching needs’. It added: ‘The faculty considers that, however able and committed individual HPLs are, it is important that core teaching should be provided by members of staff with a longer-term commitment to, and stake in, the university.’ However, the lecturers’ letter said the comparison between full-time and HLP staff denigrates and discriminates against employees on HPL contracts, many of whom have worked for the university for years. What is an HPL? Hourly paid lecturers are teaching staff paid a specific rate per hour and often work on a contract basis, which may be for a specific academic year or even a term without a guarantee of ongoing work. While hourly-paid roles are often taken up by postgraduate or PhD students, many are also professionals who come in to teach alongside their main jobs. This is especially the case in the school of architecture, where architects teach alongside working in practice. Students are also opposing the cuts. A letter sent by the Greenwich Landscape and Architecture Society to School of Design head Chris Pallant and associate head Rashesh Ram said the proposed changes would ‘damage the credibility’ of the course and reputation of the School of Design. ‘Students are concerned that being taught in larger groups by multiple full-time tutors will not only prevent them from learning from real-life practitioners, but also create problems with design process as no one will fully know their project and be able to provide them with the guidance equivalent to 1:1 tutorials we currently have,’ it said. Lecturers have also urged the university to explain its justification for the cuts, given that the university is in good financial health. Last year, financial records show that Greenwich University made a surplus of more than £33 million. In a statement issued on the cuts at Greenwich, UCU general secretary Jo Grady said: ‘Students are having their fees hiked, yet the University of Greenwich wants to sack hundreds of their teachers and instead bring in a pool of zero-hour academics, all while the vice-chancellor's pay continues to soar. These are the actions of the very worst type of rogue employer, not a public institution of Greenwich’s standing. ‘There is no financial justification to force through these cuts, and if the university continues to do so, impacted courses will be stripped of their academic value. It must think again.’ The spokesperson said the UCU had taken steps to raise a dispute with the university and was moving to consultation on a ballot for strike action. Greenwich University has been approached for comment. 2025-05-15 Ella Jessel comment and share

WizardLM, a Beijing-based Microsoft AI research group, appears to have joined Tencent, the Chinese company that owns WeChat and blockbuster games like PUBG Mobile. In a post on X on Tuesday, Can Xu, a senior AI researcher who led a number of projects within WizardLM, said that he and the team left Microsoft to join Hunyuan, one of Tencent’s AI development orgs. Over the past few months, Hunyuan has released AI models, including video and 3D object generators. WizardLM has already released a Hunyuan-branded model, in fact: Hunyuan-TurboS 0416. In an X post, Qingfeng Sun, who claims to be a “co-founder” of WizardLM, says that Hunyuan-TurboS 0416 outperforms “open” AI models like Google’s Gemma 3 series. It’s not clear how many researchers are still a part of WizardLM or when the team might’ve left Microsoft. We’ve reached out to both Tencent and Microsoft for comment. WizardLM, formed several years ago, has a bit of a strange history. Last April, the team, then under Microsoft, released a family of AI models, WizardLM-2, that it said was competitive with OpenAI’s GPT-4. But after only a day, Microsoft pulled WizardLM-2 from the web, saying that the models hadn’t undergone “toxicity testing.” “We accidentally missed an item required in the model release process — toxicity testing,” the WizardLM team wrote in a post on X on April 16, 2024. “We are currently completing this test quickly and then will re-release our model as soon as possible.” Techcrunch event Join us at TechCrunch Sessions: AI Secure your spot for our leading AI industry event with speakers from OpenAI, Anthropic, and Cohere. For a limited time, tickets are just $292 for an entire day of expert talks, workshops, and potent networking. Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you’ve built — without the big spend. Available through May 9 or while tables last. Berkeley, CA | June 5 REGISTER NOW The deletion came a little too late. Users quickly reuploaded the original WizardLM-2 models as well as customized, fine-tuned versions. Meanwhile, in a post on the AI dev platform Hugging Face, Hugging Face CEO Clément Delangue said that Microsoft’s move, which also wiped out other WizardLM models, harmed the Hugging Face community by breaking a number of open source projects. “[The WizardLM] models were collectively downloaded over a hundred thousand times a month,” Delangue wrote at the time. “We apologize for the inconvenience & are trying to get in touch with the author [and] Microsoft in order to try to find a good resolution for community members.” At Tencent, it seems WizardLM will keep doing what it was doing, more or less: developing and releasing AI models. Tencent recently restructured its Hunyuan team, establishing two new units and upping its AI infrastructure spending. Tencent attributed its 8% year-over-year growth in Q1 2025 to the company’s AI investments. Tencent has said that it plans to put 90 billion yuan, or around $12.49 billion, toward capital expenditures this year, much of which will fuel its AI efforts.

The SoftBank CFO said OpenAI's planned restructuring with the nonprofit keeping control is something that was expected.