As the trend for outsourcing development grew in the past five years, Streamline Studios was one of the key names in Europe to ride that wave - but as the knock-on effect from publishers cutting deals his, the company found itself having to close its Amsterdam facility and look to new ways of working.
Just before E3 this year GamesIndustry.biz exclusively revealed the new business from the Fernandez brothers - Streamline Production. Here, co-founder Hector Fernandez explains in detail the thinking behind the move.
Q: For most people, the last they have heard of Streamline was when the production studio in Amsterdam closed down. But you've been working on other things, so take us through the new plans.
Hector Fernandez: We've been essentially closing down the production facility, meeting with our obligations and working on our international plans with Streamline Production. The focus is on the business development, creative execution, production design and management of entertainment properties for folks that want to leverage IP across multiple formats.
Ten years ago, [the videogame industry] didn't really outsource - but today it's a part of the core development, so being able to offer developers and publishers the ability to access expertise and knowledge, and to be able to deliver it on time... that's what we're doing.
What we're offering is basically our production framework that we've built up over the last ten years - all the production processes and methodologies that meant we were able to deliver on time, the first time. That's it in a nutshell.
Q: We'll talk more about that in a minute - swinging back to the Streamline Studios closure, how did that go in the end?
Hector Fernandez: It was a straightforward process - we had an overwhelming amount of supportive response from the community, the government, other co-developers. It really was a smooth transition, and since then we've been in the process of taking a look at the marketplace to see what's really developing.
I think the blood-letting of talent that we have every five years, combined with the need to drive down the cost of production, has effectively pointed towards the fact that we need production designers in this industry - it's a role that you have in film, but not really in videogames in terms of people who actually design how the pipeline works, or how the production is going to be carried out.
You see this a lot with outsourcing: Often the person who's responsible for it is either a former artist, associate producer, or a junior level individual who may not have the experience and expertise to be able to drive it forward.
More importantly, there are so many complications that come from working with an internal production that, when you go to external outsourcers, everything that's not working internally can become the problem.
So we've been looking at that issue, and how to solve it. In fact, we've been looking at it for the better part of ten years with our own company - and through that process we've developed real-world methodologies and processes into a framework that allows us to work with either an internal studio, an external studio, and a combination of our resources to be able to deliver productions.
Q: As businesses look at development costs, outsourcing has become undeniably popular - but how do you persuade them that they want to pay Streamline Production to manage that process, if it's costs they're trying to drive down?
Hector Fernandez: I think that you're always going to come down to two camps: The people that are believers, and the people that are nay-sayers - it's polarised, and I think that's because those people who are experienced in doing outsourcing well tend to say they can handle it themselves.
But the other 95 per cent who have experienced it not really working tend to look at this as a real solution. Typically when you're developing your product you look at your outsourcing strategy on a profit and loss basis - you do your numbers and allocate a percentage of budget that's going to get outsourced. You know that you're going to need to dedicate internal resources - and outsource manager - an art director, someone to sit there and review the actual work.
But what tends to happen, because of the way that people plan that work, is that those resources almost instantaneously become absorbed just trying to take care of the internal production, and there isn't the time to orchestrate the external vendor.
What people need is expertise, and a pipeline that can work as a production studio - not only capable of being able to review, manage, QA and QC the work, but can actually set them up with the appropriate vendors, saving them time and money going out the gate.
This doesn't mean that they don't have internal expertise that can provide them the right vendor - but it's a question of whether they have the time, because the true cost of outsourcing hidden from the P&L is that person's time. If you have to send them to go on-site to work with the other company, whether it's India or China or wherever, to triangulate your specifications and criteria - you're only increasing the amount of costs for that production anyway.
If you go to experts who literally do that every day for a living... Our pipeline is always turned on - just through default and process of execution, our experience can deliver what they need quicker. Most people are able to see that, if not at first glance, after our first delivery.
In traditional outsourcing, 25 per cent of the managerial effort is equal to 100 per cent of the total cost. What tends to happen to outsourcing budgets is waste through inexperience of the vendor and client to align and verify expectations - and it costs a lot to make content.
Q: So what you're saying is that while outsourcing can be a shortcut, quality material still costs money?
Hector Fernandez: Quality costs - and if you just look at how complicated it is to create a videogame a lot of people are doing Scrum, iterative design - but managing the art profit and loss as an ongoing cost.
I've given talks about this over the years, called Engineering Art - actually planning your art to essentially be successful and you don't have so much waste through effective re-use in planning of production themes.
There are different techniques to being able to handle it - the more you do it, the more you realise that it's not rocket science... but it is a smart production technique, and if you don't think about it every day it's easy for a lot of that to get lost.
Q: So how are your deals structured then?
Hector Fernandez: It's a fixed fee - based on a man-month, the amount of resources we need to be able to be on the project and basically conduct the orchestra, and just charge on top of that.
f they're working with a preferred vendor that they like, in China or wherever, we just come in and hook up with them. We make sure that the process in which they're delivering their content fits inside of the pipeline for delivery to the client - literally being able to take internal and external pipelines and integrate them. That's the magic.
Q: And is that something that you do at the start, and then monitor - or do you have to manage it the whole time?
Hector Fernandez: It's the entire time - you have to be like CNN and the Weather Channel... consistent updates. You've got to be able to sit there and make sure it works. It's one thing to plan anything on paper, but that's usually out the window in 15 minutes at the sight of the first delay. It's how you act as an operational plan to adjust to those creative chaos issues that produce effective results within game companies - how do you move to solve those problems... that makes it work.
Q: One challenge is that pretty much every developer seems to work in a slightly different way, so when multiple companies come together there's friction. How do you troubleshoot when there is an issue, so there's no impact on the production itself?
Hector Fernandez: This is exactly how we provide savings - we've worked with over 60 developers across the world who do things entirely differently. All of our processes have been proven iteratively working with everyone from people in China to people in the US.
Because there are differences, we've come to find the places where there aren't so many differences in the workflow. What we do, at the very beginning of the project, is assess how the client and external partners work internally, and look for similarities. We bring those into a pipeline that uses our methodology that we've developed over the last ten years, and structure it appropriately.
Through every production there's going to be a design and concept phase, a rough block-out phase, a texture phase, a modelling phase, an integration phase, and so on. You look at a step-phased process, with concept, production, integration, QA and QC... And it's in-between these areas that you have to manage the risk.
You can set up a schedule to cover 12 months of development knowing that the first three months are pretty much planned out - but anything beyond that is just a guess. So it's about how you manage that process - and our internal tools allow us to do that very well, because we can take metrics, we know who's creating what. It's the methodology through which we create things.
Q: So what projects have you worked on already?
Hector Fernandez: Last year we were responsible for the online internet marketing campaign for the movie Avatar - it was one of our biggest transmedia projects ever. We'd been in contact with William Morriss, 20th Century Fox and Coke Zero, and they brought us in to do the production management and creative execution.
What we did was to take the marketing plan, managed the vendors and set up the process that could take assets from the film world, the commercial television world, the game world and the social network world to create a uniquely transmedia experience. We made sure that it all worked smoothly.
And we're currently working on two projects that we'll be able to announce in the future - but it's exciting stuff. It's pretty much been a smooth process.
Q: With the Avatar thing, was that something you went to them with? Or did they find you?
Hector Fernandez: We went to Hollywood about a year ago, specifically to be closer to our motion picture clients, because traditionally they operate more in the transmedia space than videogames. Through this process we met with William Morris, who was working with Fox and Coke, to develop AVTR.com - which essentially became a hub for social viral media, and in which users could come and create all sorts of interesting campaign-orientated materials.
They had the idea, but they needed to have the production management and the creative execution expertise to be able to do that, and experience in the games space - to be able to put all that together.
It's often the same situation that clients in the videogames space find themselves in - they have ideas that need to get done, but they don't have experience or knowledge on how to pull it off. So we want to be able to bring that to people, to provide a solution - we understand from a technical and business perspective how to deliver results.
Q: So where is the business based?
Hector Fernandez: It's truly international - for the last two years we've had a presence in Asia, sales in the United States and Content Production in Europe. Going forward the US remains a sales location, Europe focuses on logistics and administration, while the folks in Asia will primarily be a content and IP production studio.
Hector Fernandez is co-founder of Streamline Production. Interview by Phil Elliott.