Keywords Studios: “We are going to keep acquiring new companies”
The video games outsourcing giant on expanding its services, fixing crunch and how it will avoid competing with its clients
Out of all the British games businesses that can be found on the stock market today, Keywords might seem like the least interesting.
After all, it's not making Jurassic World games, or Worms, or F1 racing titles, or the next Crackdown. Yet, behind-the-scenes, Keywords is working on some of the world's biggest video games.
It has artists who have worked on Batman Arkham Knight, Mass Effect Andromeda, Halo 5, Gears 4 and Just Cause 3. It has engineers who have contributed to Madden, NBA Live and Shenmue. Its audio team have handled voice recording, sound design and more for the likes of The Legend of Zelda: Breath of the Wild, Dark Souls III and Watch Dogs 2.
The company's games testers have worked on Rocket League, The Walking Dead, Mortal Kombat and Dragon Age. The localisation team has contributed to League of Legends, FIFA, Clash Royale and Assassin's Creed, while the Player Support experts handle projects such as Smite and Final Fantasy.
In reality, Keywords is one of the most interesting video game businesses operating in the UK. The challenge is in succinctly explaining exactly what it does.
"If people say: 'What do you do?' and you say: 'Everything.' It's not a very good answer," laughs chief marketing officer Andrew Brown. The industry veteran, who spent over a decade at Activision Blizzard, joined Keywords this summer.
"It's not easy explaining what we do. But it is a very complex market. If you look at a video game developer and publisher, with all the moving parts, it is tough to know everything you need to do -- even if you're working within the organisation. So explaining to anybody across all these different areas what we actually do... that's a challenge."
So let's give it a go. Keywords Studios is an outsourcing company. It's a place where games publishers and developers might go if they want something tested, localised or recorded. They can also provide artwork and engineering assistance, post-launch player support and even co-develop a full game. That sums up the company's core seven service lines (Audio, Art, Localisation, Localisation QA, Functionality QA, Engineering and Player Support), but actually there's even more services hidden away, including trailer creation, marketing and data analysis.
"It's around the entire game lifecycle, basically," Brown continues. "So, right at the front end when you are building the product, you've got to localise it, you've got to test it, you've got to put the art in. And we do art at various stages. And when you want to do a game trailer, our teams have got that capability. But when the game launches, we are then able to support that in terms of player management, player moderation and be there for the players. Now we've got, with people like Yokozuna Data, the ability to help developers understand how to avoid churn, increase monetisation... and we've got marketing, too."
Keywords has established all these service lines by, seemingly, acquiring everybody in sight. Any regular reader of Gamesindusty.biz will know our most recurring headline for the past five years has begun with 'Keywords acquires...". Companies such as Player Research, The Trailer Farm, Studio Gobo, Electric Square, Babel, Sperasoft, Enzyme, Sonox, Laced Music and a whole load more have become part of the Keywords family over the past four years.
"There are many examples of companies that have [handled acquisitions] badly. You acquire and then you over manage, and then you can then crush the talent that you've brought in."
The strategy works on paper, but in real life, acquiring even one company and integrating it is a notoriously hard thing to do. Let alone doing it on the scale that Keywords does. Indeed, the company has picked up nine new businesses this year alone.
"There are many examples of companies that have done this badly," Brown acknowledges. "You acquire and then you over manage, and then you can then crush the talent that you've brought in, and they end up moving on or not performing. Or not integrating.
"I was pretty amazed, actually, when I was looking at Keywords and how they've managed to do this. I've now lived through several [acquisitions] myself. It sounds a bit cliché, but we are a bit like a family. Everybody respects everybody. When you get a new company, you've acquired those people because they're really good at something. And the worst thing you can do is put barriers in the way to stop them being good. So the first thing is to allow them to breathe, and continue to let them do what they'e been doing. And then look at how you can help them.
"They've all got ambitions. They were on a journey and you want to realise those ambitions. What they get by joining the family is to leverage the expertise that we've got, find new customers and get best practice in certain areas. Suddenly they're on an accelerator. We put in place some stuff that helps to consolidate revenues and processes and tools... but we're not super heavy with that... it's just enough.
"How I see us is basically a curated collection of boutique services which are best-in-class and really good at what they do. But they have this golden thread that connects them all, which is Keywords. And that golden thread brings customers to the studio. And that offers benefits such as more consistency and the ability to scale.
"That is a great formula for success. You're not building some sort-of cookie cutter factory of services. You are keeping what makes those things great when you acquired them, and I think that's super rare. I haven't really seen much else in any other industry that have succeeded in doing this in the way that we are. There are tonnes of studios and companies in this space. So there is still a long way to go. We are finding that there are a lot of people who want to join us. We don't need to sell it so much. People are very attracted to this model, because it allows them to realise the vision they had when they set out."
"The core strategy is going to continue, which is basically to keep acquiring, to consolidate and effectively cross-sell."
Recent acquisitions have included developers such as Studio Gobo. So with that in mind, is it not possible Keywords can move from behind-the-scenes, and start signing, creating and publishing games themselves?
"What we are not about is IP," Brown says firmly. "We don't own IP. We don't intend to own IP. We don't want to become a competitor to our customers. From our venture side [Brown leads the company's investment division], I get quite a lot of opportunities where a company either has a complete focus on IP, or they've got IP in the mix. And generally that is not helpful.
"A lot of games companies might go away and build something they need. Like a back-end system for managing players online, for example. They've now produced something that is really helpful for them, and they realise that it might be helpful to the industry. So they look to us about how we can broaden that out and monetise it. Now if they spin it out then that's fine. But if they want to keep it in an organisation where they've got IP, then that's hard for us."
Keywords believes that outsourcing will become a more prominent side of the industry. Speaking to Gamesindustry.biz earlier in the year, CEO Andrew Day said that, in time, he expects more of game development will be outsourced, much like it is in the movie industry.
As the biggest video game outsource specialist, it's not surprising to hear them say that. If the industry transitioned to more outsourcing, you can expect Keywords will be the biggest beneficiary. Yet Brown believes that this will ultimately be a very positive thing for the video games industry overall. Not just for developers and publishers, but also the staff. Citing the recent conversation around video game crunch, Brown says outsourcing can solve a lot of these issues, and also keep staff motivated.
"It's gone through a bit of an evolution, but there was that period of time -- which still exists -- where there are developers and publishers who have all this resource in-house because they think if they own the people, it offers security, consistency and they're my people so I'll get more from them.
"We don't own IP. We don't intend to own IP. We don't want to become a competitor to our customers"
"What you discover, for example, is that you might have 500 people in your facility all year. For large parts of the year you need 300, and at crunch you need 800. So when it gets to crunch time, traditionally, the publishers that try to do everything in house, they'll go to agencies and hire people in. So they're paying a premium and you can't really know the quality of the individuals that you're pulling in.
"For some of that year, you're carrying staff that -- quite honestly -- you don't need. And the other thing is that you find where you've had people for multiple years working on the same title, they can get a bit snowblind. You have worked on that same game, every iteration of it, for several years. And it just gets a bit monotonous. So there are definitely reasons why having your in-house solution isn't always efficient and not always as motivational for the people you've got as it should be.
"When you then look at the outsourcing side, there are lots of different options on outsourcing -- in terms of the level of commitment that you want to make -- but what we are able to do is bring in very well-qualified people to do what's needed. We've got situations where people fully outsource certain functions to us. That means we can flex the staff in there, so we don't need to keep 500 people in the seats at all times. We can move that number up and down. The other thing is that when people get that snow blindness that I talked about, and needs something else, then we're able to move people around our organisation, so we can take them from one game and move them to another."
Brown concludes: "There's that mental barrier where companies think that if they outsource this, then they might not have control over it. If they outsource this, then they are taking a risk on security. If they outsource this, then maybe they won't get the focus they need. But actually it's the opposite. We don't have to deal with politics. We bypass a lot of that stuff, because we're not actually part of the customer's organisation. We are not on the org chart, as you were. So we can just focus on doing a great job, and we've got very good security. We've got loyalty from our people, who want to stay with us and want to do the right things."
There's clearly more to the outsourcing life than meets the eye. It may not be the sexiest part of the video games business, but beneath the surface there are exciting things happening. And if the games industry follows in the path of movies - which outsources almost all of its functions - we'll be likely talking a lot more about the likes of Keywords in the years to come.