Video-Game Publishers Outsource Development

randomErr writes "According to a San Jose Mercury News article reprinted at the Miami Herald: 'Mark Vange is in the vanguard of globalizing the video-game industry. He employs 30 game developers in St. Petersburg, Russia, who have worked on everything from flight simulators to dragon-fighting games. 'We can get the work done for half the cost that it takes in the U.S.,' said Vange, president of Ketsujin Studios. Similar outsourcing of video-game production is being done in places like China, India, Vietnam and parts of Eastern Europe. California game developers, who are the creative force behind a $10 billion industry in the U.S. market, view the trend with a combination of fear and anticipation'."

Awesome!

[Shakrai]

<Sarcasm>This is great! No really -- now my video games won't cost $50+ each.

What? You mean the price won't go down? But we are saving so much money on the labor -- where is all that extra cash going?</Sarcasm>

Sarcasm aside I think those three sentences pretty much sum up my feelings (and most other /.'ers?) on all types of outsourcing (techie or otherwise). It's an excuse to pad the pockets of the fat shareholders at the expense of the middle class.

Too bad smarter people then me have looked at it and can't come up with a solution. I've said this before but I'll say it again: If this trend towards globalization continues I fear we may wind up proving poor old Karl Marx correct. It's really a crying shame too because capitalism actually does drive innovation. Too bad it also drives greed.

Capitalism reers its ugly head.

[Metallic Matty]

This will probably just be labelled as flamebait or trolling, but whatever.

The fact of the matter is, outsourcing is the end result of the bloated salaries of programmers and designers in the US (among others.) The fact that they can make it for HALF as much in St. Petersburg just goes to show the problem. If someone is willing to do the same job, just as well, for half the price, why would a company NOT do so?

People bitch about this, and that's fine. But at the same time, those people claim to be for free-market economy. But of course, only when it supports THEIR cause.

Such is life, I suppose.

Moderate this! *finger*

Re:Awesome!

[black mariah]

Because, you know, it would be a bad idea for developers to MAKE MONEY and be able to make more games. That's never a good thing, you know. A business. Making money. It'll never catch on.

Re:Capitalism reers its ugly head.

[Shakrai]

The fact of the matter is, outsourcing is the end result of the bloated salaries of programmers and designers in the US (among others.) The fact that they can make it for HALF as much in St. Petersburg just goes to show the problem. If someone is willing to do the same job, just as well, for half the price, why would a company NOT do so?

Yeah because it has nothing at all to do with cost of living (why don't you try living in Southern California on the salary that these folks in Russia are getting) or corporate greed. No it's all the fault of those fat overpaid American bastards.

Hey, see my other post [slashdot.org]. If this is going to save the industry so much money when is the price of my games going to drop?

Re:Awesome!

[Shakrai]

Because, you know, it would be a bad idea for developers to MAKE MONEY and be able to make more games. That's never a good thing, you know. A business. Making money. It'll never catch on.

Let's see how much money they make when they wipe out the American middle class. How many games are the CEOs going to buy? There's also a wonderful concept to business called: Not shooting yourself in the foot for the sake of a temporary increase in profits.

Good luck...

[Tirinal]

The problem with such an approach is that cultural differences will likely cause numerous rifts between the marketability of a game and its ultimate appeal. Not only is guy outsourcing game programmers, but he's also outsourcing game designers, which usually has disastrous results. Games are highly subjective, and you can't have one part of the world design a game for another part of the world and expect it do well with no exceptions. Examples abound. At least 80% of all Japanese video games never make it stateside. Most every FPS in existence has little to no appeal in any part of Asia. The most popular MMO in the world, Lineage (soon to be surpassed by its sequel), is virtually unknown in the western hemisphere. Ad infinitum. These methods to save a quick buck rarely pan out in the end, though they look good on paper.

Re:Sim City

[iswm]

Well, like the article says, they only pay them half as much as they would Americans, so there might be the "getting what you pay for" factor, not saying American devs write better code; far from it. But when you pay half has much, you can't always expect the same quality.

here's an idea

[negacao]

When a company has 50% or more of its "high pay" employees outside of the US, kick them the fuck out - they're not a US company anymore.

At the least, put a HIGH tariff on thier products - the same way we currently do with imported steel.

If the company isn't willing to give back to the country that allows it's existence, the country should cease to allow it's existence.

Unfortunately, this'll never happen with our current gov't.

half the cost

[fermion]

'We can get the work done for half the cost that it takes in the U.S.,' said Vange, president of Ketsujin Studios

Well, let's just hope that Vange gets paid half of what is normal in the U.S. and the price for the games are half as much so that the unemployed, underemployed, and those working a minimum wage to compete with Russia can afford the games.

Unless, of course, the primary market for these games is Russia.

I don't really see outsourcing as such a big deal. I just don't understand why some CEOs get paid so much money to supervise a workforce halfway across the world for a company that is officially located in a third world country. It really seems the company could increase shareholder values by moving the CxO to those cheaper countries as well.

Re:Awesome!

[snookerdoodle]

The solution will occur when all management of all corporations gets outsourced. The truth is, Increasing Shareholder Value is the only objective, and having your corporation managed by a shrewd, talented CEO in Bangalor who gets paid $30,000 per year with no bonus or stock options is a smart thing to do.

'not even half joking...

Mark

Re:Awesome!

[Shakrai]

Solution...become a shareholder.

Why don't you try putting your kids through college, paying the mortgage and bills and become a fat shareholder. Your 100 shares of MSFT or eBay don't count on this level. What are you going to see from outsourced labor? Perhaps a nickel more a year in dividends?

Use your head before you make arrogant statements like this.

Re:Bad idea for several reasons

[Anonymous Coward]

Actually art is one of the few things that can't really be outsourced well. Cultural differences affect things like style and color selection. I remember reading a while back about problems US companies were having outsourcing art to India.

Re:Awesome!

[wrf3]

Greed is present regardless of the economic model.

Economics 101

[hng_rval]

What? You mean the price won't go down? But we are saving so much money on the labor -- where is all that extra cash going?

Unfortunately, that isn't how the economy works.

When you are producing a commodity product, like lumber, coal, or oil, then competition drives the price of your product down to the average total cost of producing that product. In theory, in a commodity market the profit margins are enough by the end of the year to leave each firm in the industry with exactly zero profit. If games were a commodity, reducing either the variable costs or the fixed costs would result in a reduction in price.

Games, however, are not commodities. In fact, they are much closer to a monopoly market. When a company makes a game, no other company can produce that same game. If I want to purchase Diablo II, I have to pay Blizzard exactly how much they are asking - no one else can provide that product.

I can purchase Fallout 2 instead, and there is some price sensitivity there. However, I would not necessarily purchase Fallout 2 over Diablo if Fallout was $10 less. Game companies run the demand curve, and price their games accordingly - $50.

In general, when you are the sole provider of a product you should charge as much as necessary to maximize the equation:

Profit = (Price - Variable Cost) * Quantity.

Quantity = Func(Price)

Changing the cost of producing the game has no effect on the Variable Cost or the Quantity, and therefore should have no effect on the price you pay for the game.

Re:Awesome!

[Shakrai]

Isn't this the same bullshit argument that people have been using for the past 20 years to prove that the outflow of jobs to factories in Japan is going to destroy the American economy within 10 years? Hey! It is!

Yeah all these arguments must be wrong because the American economy is doing so well right now. Why just the other day the unemployment rate dropped -- err wait that was because people gave up and stopped trying to find a job.

Re:Economics 101

[Shakrai]

Changing the cost of producing the game has no effect on the Variable Cost or the Quantity, and therefore should have no effect on the price you pay for the game.

Then why not do the Patriotic thing and actually keep the jobs here since we are making so much anyway? We can write the code in Russia for half the price? Big fucking deal! We could probably pad the bottom line by that much if Mr. CEO took a 15% salary cut, but god knows that isn't going to happen anytime soon.

I love when companies lay hundreds of people off and then you tally up the salary of the laid off workers (along with benefits and other costs) and it doesn't equal the salary of the CEO and his stock options. The same CEO I might point out that ran the company so well that it was necessary to lay those people off in the first place.

Fuck the rich fatcat bastards. This is my country too.

Feed the horse an increasing ratio of sawdust...

[OmniGeek]

Just because the US middle class hasn't been fully impoverished YET (and we're NOT better off than we were ten years ago!) doesn't mean that continuing outsourcing WON'T do it. Why should one expect a relatively highly-paid workforce with political rights and high expectations to be able to compete with much-lower-paid folk who can't unionize and don't get health insurance or retirement benefits, and will work for peanuts even by local standards 'cause any job is better than none?

With outsourcing trends as they are, we are rather likely to get what Neal Stephenson describes in Snow Crash as an globally-distributed layer of what a Pakistani bricklayer would call prosperity. Unfortunately for us in the US, *we* will call it "abject poverty".

cause != effect

[Howzer]

You've (typically, I must add) confused cause and effect.

Greed is the thing that drives both capitalism and innovation, not the other way around.

The reason centrally planned economies don't work is because, at the heart of it, they tell people not to be greedy. And people don't listen.

Greed is the thing that causes companies to form to make games. Greed is the thing that causes programmers (fresh off a hit game) to demand the big bucks. Greed is the thing that then drives the _people with the money_ to go elsewhere to hire the programmers.

It's their money.

Saying they can do what they like with it is capitalism. Saying they can't pad their pockets is, my friend, central planning.

So far from "proving Carl Marx right" what you're actually doing is making the case for why he is still wrong.

Re:Capitalism reers its ugly head.

[Anonymous Coward]

[i]Hey, see my other post. If this is going to save the industry so much money when is the price of my games going to drop?[/i]

The same time movie tickets, CDs, shoes, clothing, cars, and gas drops.

NEVER.

Movie tickets at my local theater are not $8+ vs $6 when it first opened about 5 years ago.

CD prices aren't any different than before they discovered the price fixing scheme. I got a $13~ refund check for the hundreds (if not thousands) I've been FUCKED out of by these pricks price scheming, and $13 is supposed to make up for it? At the very least, drop the costs of CDs.

...And for that matter, why are CDs the same price as they were 10 years later? Is the music industry the only industry on the face of the planet that hasn't reaped huge cuts in production costs because of new technology?

Shoes are produced by Chinese children getting paid $1 USD a day. If the average worker can make 5 shoes a day getting paid $1 a day, factoring in shipping, manufacturing, material, etc, shoes should cost...well, at lot less than the $80 they charge you for some new Nikes. Same with clothing.

Well, you get my point.

Re:Awesome!

[GileadGreene]

When enough American jobs have been outsourced, there won't be enough American economy left to purchase the luxury products being produced.

At which point America will become the outsourcing destination of choice for all those companies trying to make luxury products for the Indian and Chinese markets. Nothing like a little cheap American labor to help undercut the competition in all those high-cost-of-living places like Bangalore and Beijing...

Re:Economics 101

[santos_douglas]

Game companies run the demand curve

Actually that would be the supply curve.

And wow, people are still surprised a company would make the rational choice to use cheaper labor that is readily available? Shocking!

I don't see any video game companies making unusually high (above market) profits, this is just competition. If anything, it means more money available to develop more games, which is (more shock coming) good for the consumer.

Re:Capitalism reers its ugly head.

[GileadGreene]

...you try living in Southern California on the salary that these folks in Russia are getting...

So why don't you move to Russia? Ok, maybe that's a little extreme. But you could at least try getting the hell out of SoCal. I just moved out of LA last year. My salary dropped by more than 50%, but my standard of living has actually gone up a little. Not to mention that my quality of life is definitely higher, and my blood pressure is probably much lower now that I'm not having to deal the parking lot known as the 405.

Re:Yeah, because this is an excellent idea

[Anonymous Coward]

What a great way to argue. I'm glad you backed up your argument with a statistically significant sample of *ONE* game.

Although the education system in Russia may be getting a little bit worse, they (and eastern europe) still create exceptional students that are quite capable.

Remember, Sergei Brin (founder of google) is a first-generation Russian. His father is also a pretty smart guy.

Also, I would like to point out an the 'Serious Sam' series, made in _Croatia_ of all places, that is quite good and entertaining.

Outsourcing is exported inflation.

[TheNarrator]

Here's the moderately simple and brief explanation for outsourcing: Inflation in this country is really out of control, in things we can't trade like health care, tuition, real estate, and things we can't control like gasoline and metals. That's because the government has been pumping so much money into the economy to try to get it to go somewhere via lower interest rates and increased government spending. With all this money flying around it would have already have caused a ton of inflation, and wages would be very high in world wide terms, except people have been able to send the work overseas. That was less possible 20 years ago and almost totally impossible 30 years ago so we have this weird kind of recession where we are losing jobs in anything importable put a lot of people are doing really well in anything we can't export like real estate. The main export of the United States now is inflation. Here's the slightly longer explanation. [squinky.org]

Re:Nothing new

[Anonymous Coward]

The trend of closing down game companies in the United States and having the work outsourced to Russia is new.

The old trend was for game companies to simply go out of business.

Re:Awesome!

[Anonymous Coward]

so jobs moving overseas has nothing to do with unemployment or the economy, eh?

I don't see what the big deal is...

[silentrob]

I'm an independent video game developer and I'd like to point out that the indy scene has been international for quite a very long while.

Does anybody have a fucking clue about what country the words 'Nintendo' or 'Sega' comes from? Can you guess where the international headquarters for Sony is located?

Truth is that the video game industry has never been primarily American. It's always been international.

Everyone needs to quit bitching. Nothing to see here, move along, goddammit.

Re:Awesome!

[Shakrai]

That is a SYMPTOM, dumbass, not a cause

Really? So if my profession is outsourced to the point where I can't find a job within the Tri-State area that's a symptom not a cause of my unemployment?

The economy is shitty simply because the economy is shitty

Yeah it has nothing to do with the massive amounts of unemployment caused by outsourcing and the general lack in confidence that the American middle class has these days.

It's simply the way the economy works.

I'll see if you are still so detached and clinical about it when you are in the process of applying for your unemployment extension or filing bankruptcy.

Re:Yeah, because this is an excellent idea

[Turmio]

Yeah, it's a notorious fact that Russians [gamespot.com] suck [gamespot.com] in the art of making PC games [gamespot.com]

Re:cause != effect

[HoneyBunchesOfGoats]

Greed is the thing that drives ...innovation

Greed is the thing that causes companies to form to make games.

Don't some people do it because they enjoy it?

Re:Economics 101

[ciggieposeur]

Your sig: Heartless capitalism has saved more people from poverty than any progressive program of social equality ever has.

Dead wrong. Under "Communism" (very loosely defined), Soviet Russia and China have both brought literacy, crime control, and medical care to about 2 billion people. Under "Socialist Democracy" European nations, India, and Canada have brought the same to another billion people. With the collapse of Soviet Russia, the Eastern Bloc nations have had serious increases in infant mortality and crime, and losses in medical care and crime control.

The United States OTOH has managed to provide medical care, education, and crime control to only about 100 million people, and only then by stealing (by which I mean "taking without paying for") resources from about one billion citizens in Mexico, Central America, Oceania, and Africa. Hardly the most efficient economy.

In conclusion, you're the one who has (as we say in Texas) swallowed a big pile of bull.

Re:Need Constitutional Amendment on Economic Treas

[Anonymous Coward]

Your can't ban outsourcing, that would mean every company in the US would have to close their offices around the world. It wouldn't happen, incentives are more likely to work.

Re:Awesome!

[andy1307]

So the American middle class isn't threatened with extinction when you buy computer hardware made in China or Taiwan? If it wasn't for cheaper manufacturing in those countries, you wouldn't have a sub-1000$ PC.

Re:Awesome!

[aastanna]

Marx also said that capatilism wasn't advanced enough to support communism at the time of his writing. Marx was all about productive forces, and communism was supposed to happen when we went from a situation of relative scarcity to abundance.

If you imagine a world with free electricity due to fusion power, and sufficiently advanced robotics such that providing a basic standard of living for everyone isn't too expensive, communism sounds pretty reasonable. So just sit back, wait for your robotic butler to be invented, and look forward to the revolution. :)

Re:Awesome!

[bezza]

Wow, everyone is a capitalist until their job is at stake. Then all of a sudden you are a communist.
Why should your job be protected? This is the same thinking that is placing tariffs on goods and making things worse off for everyone.
Choose a side of thinking. Each has its merits. But don't try and change when it isn't going well for you.

Re:Economics 101

[Shakrai]

You aren't forced to stay in the US. But if you do decide to stay there will be plenty of jobs.

So I should have to move out of my country to find a job? Is this one of those benefits of globalization that I'm always hearing about? First it was move out of my hometown, then move out of my state, now I have to leave my country?

Saying there are "plenty of jobs" ignores the tens of thousands of people that quit looking everyday because they can't find one.

Personally I'm not worried as I work in a sector that seems to be fairly immune to the ups and downs of the economy (Insurance). I am however worried about the future of my country.

If you even had any idea what life was like in India (or Russia) I doubt you would have made that statement. Unless of course you feel a life in the US is worth more than a life in another country..

WTF is this? What in my statement made you think I'm devaluing life in India or Russia? So it's better that Americans lose jobs and starve then Indians or Russians? Is that what your saying?

Re:Awesome!

[Shakrai]

If your job is outsourced then just move or find another job.

Move where asshole? To another fucking country? What about my friends, family and SO/spouse? What if the other country who is getting all of our jobs won't give me a visa.

And just why the fuck should I have to move to some piss ass third-world country? If Indian labor is so great maybe the CEO of the company using outsourced labor should go live there.

Re:Economics 101

[santos_douglas]

First of all, congratulations on being the first to respond to my trolling sig, that didn't take long.

Two, I'm not going to get into yet another long drawn out flamefest with someone who isn't likely to have his mind changed no matter what is said. But you've obviously given this topic some thought so what the heck. My primary problem is that you are distorting my original statement assuming I equate capitalism with the United States (which is less true each passing year), and proceed to compare it to communism. Not that it is really related, but the US has been moving towards a more socialistic structure both economically and politically for the better part of the last century, to its detriment.

Still some counter is in order, but I'll keep it short. Perhaps you have forgotten about the day long food waiting lines common under communist russia? Not so common now under a more capitalistic state are they? True, the conversion to democracy was not well managed in russia, but it's too late to change now. Also, China is hardly a good example, similar to russia, their own people starved for lack of food production for much of their history. It has only been since the slow and carefully planned transition to a more capitalistic structure that the nation has begun to flourish. It is the old communist leaders who are being dragged kicking and screaming to capitalism, not the other way around. Who knows, someday china may be more democratic and capitalistic than the US, and that is a day to truly fear. As a final note, if you net out the hundreds of millions murdered or 'disappeared' under communism, I'd say your numbers are a little more even.

Oh and one last thing, I don't want to get in to the complex legal vagaries of why George Bush is not a felon (ie, he's never been convicted of a felony), but I'm sure the DNC would be interested.

Amerocentric

[KrackHouse]

"Let's see how much money they make when they wipe out the American middle class. How many games are the CEOs going to buy? There's also a wonderful concept to business called: Not shooting yourself in the foot for the sake of a temporary increase in profits."

Population of China - 1.4 Billion
Population of India - 1.0 Billion
Population of America - 0.3 Billion

"Not only are such global imbalances unsustainable but in the US, a lasting recovery cannot be built on a foundation of ever-falling saving rates, ever-widening current-account and trade deficits, and ever-rising debt burdens."
Morgan Stanley global economist Stephen Roach

America has an old population compared to India. Our Baby Boomers are retiring and asking for handouts and we won't have enough people working to fill the jobs of the impending wave of retirees or to pay for all of the medicine they're going to need.

If the American middle class evaporated it wouldn't be the end of the world for multinational corporations, including those based in the US. Most of our tax dollars are going to go old people who want expensive pills for free.

Education will suffer because kids can't vote and your average retiree is worried about immediate needs not the long term health of this country. I love democracy but America is headed down the crapper because of it.

And remember

[Aexia]

When you stop looking for work, you're no longer counted as 'unemployed'.

I love it when people claim 'The US has an unemployment rate that's the envy of the world.' No we don't. The rest of the world just reports it in an honest manner.

Re:Economics 101

[gnovos]

As to the question of why outsource? Well, if you are a CEO and you could reduce your development costs by 50%, you have an obligation to your shareholders to do so as long as the benefits outweigh the consequences.

By that logic, as long as the money you pay out in losing wrongful death suits is less than the money you make selling a remarkably dangerous/faulty product, then it's the duty of the CEO to place that product on the market regardless of the number of people that die.

How much money can you make selling child porn? As long as the money you make is worth more to the company than the jail-time that your employees who get caught suffer, then child-porn is a REQUIREMENT.

If you can make trillions holding the world hostage with bioweapons, then that is the absolutly best option that your biotech company can choose.

Morality indeed.

Re:Capitalism reers its ugly head.

[kendoka]

Hear that. I don't mind acknowledging that I am not competitive with software designers in St. Petersburg if the 'other side' could acknowledge they are overpaid; perhaps much more than we are. Palo Alto was so expensive to live in firefighters were living in shelters at one point - is that right for a guy risking his life for 45-60k a year? (I dunno the figure)

A lot of free-market purists say the market rights itself but if so then why are we still subsidizing farmers? Many people, perhaps too many make sacrifices to do the job they love. Who'd really want to have a career in the military, FBI or CIA at this point? Get shot for 20-30 years for 50k a year and a pension? If you're smart enough to be in the CIA you could do a CEO's job. Models won't get out of bed for less than $10,000 a day, CEOs can rob my mom of her retirement, and yet I'm supposed to feel guilty for my salary?

I feel I get paid enough to have the American dream - you work hard and you can have a career, own a (small) place, put a car in the garage, and maybe still afford a kid if you and your lady make enough. Carly would disagree - it's not our god-given right to have a job - but nobody's outsourcing her job, or thinning her multi-million dollar a year salary... yet.

Foreigners deserve jobs too

[Mr. Underbridge]

Let's see how much money they make when they wipe out the American middle class. How many games are the CEOs going to buy? There's also a wonderful concept to business called: Not shooting yourself in the foot for the sake of a temporary increase in profits.

Why do Americans think they're the only ones who deserve decent jobs? Is the rest of the world supposed to sit in poverty forever while America maintains its enormous salaries? I don't think so. The rest of the world is becoming educated, becoming skilled, and deserves good jobs just as much as America. And another hint - there are a lot of gamers in foreign countries too.

Geeks in Russia are more like Americans than American geeks are to other Americans. People are people, and there's no sense in this mindless nationalism and xenophobia.

They're not shooting themselves in the foot

[rsilvergun]

This is a common misconception. As the American Middle Class suffers and becomes poor the growing Middle Class in India and China provide all the markets capitalists need. They're abandoning the American middle class. Americans want too high a standard of living for their (capitalists) liking. We expect 40 hour work weeks, Unions, job security and maybe even a little real Democracy (very little of that, but it's still a nusance when you're building a new call center and the locals won't let you because it's a death trap, and they passed an ordinance against death traps in the last election). China and India are ideal. They have so many people that it's physically impossible for enough of them to join the middle class and stem off the supply of cheap, desparte labor.

The idea that capitalists can't abandon America is actually part of their rhetoric. It's one of the arguments they like to bring up whenever anyone talks about nasty stuff like tariffs and maybe baning some of those Walmart imports from some of the more brutal regimes. "We can't leave, we need America, we need it's people". Don't be fooled. They can leave and they don't need you.

MOD UP. Re:Economics 101

[ArghBlarg]

Wish I had mod points right now. Most corporatism- and globalization-related problems would go away if companies couldn't hide behind the argument that shareholder dividends are priority #1. I think it would be better if it were enshrined that every company's priorities were:

1) To better the living conditions and well-being of society and mankind as a whole;
2) To ensure that current and future employees cannot be 'let go' unless there is *no* other way to reduce costs for the company (ie., senior execs ' pay is based upon company performance -- they lose first, then employees).
3) Maximize shareholder value.

Of course no one will ever let this happen, as it means the end of the golden parachute/handshake/Enron behaviour/etc.

Re:Awesome!

[Shakrai]

Obviously if you have such a poor work record or are stuck into such a narrow field that you can't find another job without having to move to another country then you need to re-educate your self.

I love this Republican attitude of "If you can't get a job and feed yourself then it must be your fault". It completely ignores reality. What if you can't afford to reeducate yourself or move? What if you are supporting kids and can't afford to take a pay cut?

Why don't you have a little bit of compassion for people who are harmed by events beyond their control instead of implying that it's their fault and they can automagically do something to make it all better?

Re:Awesome!

[demachina]

Not to worry, American executives are going to get theirs in the end. They are somewhat blinded by the wonders of cheap labor at the moment to they point that they haven't realized they are exporting capital and intellectual property in to countries that would just as soon bury America as look at it.

It was a tolerable to export no brainer manufacturing to China but when they started exporting skill jobs, capital and intellectual property they signed their own death warrant. In industry after industry a critical mass of capital, intellectual property and expertise will develop in these outsourcing hotspots. When it does they will reach a point they don't need the obnoxius executives in the U.S. who are taking the lion's share of the wealth. They will, and in some cases already have, take all the expertise, talent, market insight and knowledge they've developed, start their own companies and bury their former American benefactors.

A key problem with American business is its become incredibly short sighted and is so fixated on quarterly results it simply isn't looking at the long view. They saw this huge boon in their bottomlines with cheap labor but they failed to realize in another decade or two executive in China will be calling the shots and they to will be expendable. Of course American execs, not being entirely stupid, are countering by wholesale looting of their companies now so they and their families will have all the money they need by the time their companies and the U.S. economy collapses. Hopefully they are also smart enough to park their wealth in something besides U.S. dollars. Warrent Buffet, one of the smartest business men in the world is betting heavily against the U.S.dollar with Berkshire Hathaway. He took a look at the half trillion dollar budget deficit and the half trillion dollar trade deficit and quickly realized the U.S. is currently being run by retarded chimps.

America had some huge advantages after World War II since it came out of that war unscathed versus the rest of the world, and in fact had been transformed in to an engineer rich, manufacturing dynamo by the war. The GI bill further pushed a well educated population that did lead the world. That huge advantage, and the prosperity it engendered, unfortunately corrupted America to the point it simply isn't globally competitive any more. The rest of the world meahwhile has recovered from the ravages of World War II and the Cold War, is hungry and is now very well educated compared to the U.S.

Add in to this the fact the U.S. government is now completely corrupted. Just look at the insanity, bribery and fraud perpetrated in last years Medicare bill. We are reaching the point the drug and healthcare industries have effectively purchased the government in the U.S. and health costs would drive a dagger in to American competitiveness if cheap overseas labor didn't. Health care and pharmacueticals appear poised to be among the few industries in the U.S. that will prosper in coming years.

Its unlikely the U.S. will pull out of its competitive tail spin without massive improvements in education, massive health care reform, and a complete gutting of our corrupted governemnt which is spending money like a drunk sailor. Unfortunately we've found a flaw in our two party system in that both the Democrats and Republicans are equally corrupt, and nearly indistinguishable from one other so we can't fix out government through the ballot box. If the U.S. doesn't get a cadre of smart people in power, with a mandate for reform we are doomed, and that isn't going to happen in this years election. Both main party presidential candidates are equally bad, so much so I would really rather take a chance on Nader though he doesn't really have the breadth and sobriety needed to really govern.

Simple economics

[Mr. Underbridge]

Why does everyone else think that Americans should be altruistic to the point of extinction, but of course they can be protectionist and xenophobic.

It's not altruistic if someone outcompetes you for a job.

Then why don't they make games for themselves? Why does everyone want in on the American economy?

First, many great games are created by foreign developers. Second, there is no such thing as an "American" economy. There is only a world economy.

That's why this "chicken little" crap doesn't make sense. People predicted that Japan would kill us back in the 60's. They didn't. The fact is, that as a foreign economy steals jobs, it also adds consumers. This is an overall GOOD THING for the total world economy. And it's mainly the shittiest jobs getting outsourced anyway.

I've said this many times on slashdot, but as long as America innovates and steals talent from overseas through our university system, we'll be fine. If not, we'll fail.

People used your same arguments in the 50's to argue that textiles and manufacturing jobs needed to stay in America. Today, if our economy was based on that, we'd be decadeds behind Asia and Europe.

America's economy is a constant process of innovating new high-paying jobs and exporting of old, no longer "cool" jobs. Anyone who can't see this has neither a historical perspective nor grasp of basic macroeconomics.

Re:Awesome!

[MechaStreisand]

That is not a sense of entitlement - it's sheer pragmatism. There are 300 million people in the US. By and large, most of them need to be employed. Now, if employers are allowed to freely outsource all but service jobs to countries where the cost of living is so low that Americans CANNOT compete, then what the fuck are the workers going to do?

If the employers in the US want to take actions that would put everyone out of work, they HAVE to be stopped. That's all there is to it. The only point up for debate here is whether they really are going to destroy the middle class or not. And I think that that's far too likely to happen to just ignore it. Don't stick your head in the sand.

Re:I don't see what the big deal is...

[patternjuggler]

Does anybody have a fucking clue about what country the words 'Nintendo' or 'Sega' comes from? Can you guess where the international headquarters for Sony is located?

And where are their various regional headquarters located? How many Japanese workers did they have to fire when they set those up?

The point is not where a company is located, but whether it built on its successes firing the people who worked hard to make the company what it is because cheaper laborers were found in some other country.

Re:Awesome!

[black mariah]

Businesses have ALWAYS done anything they could to save costs. Pretending it's a new thing to further your argument is short-sighted and flat-out fucking stupid.

Why not outsource the higher level jobs? Because those people NEED TO BE HERE. Game companies might farm out the low-level artwork jobs and stupid coding tasks to some dude in India, but they still need their designer here. They still need the main coders here. IT companies might outsource call center people but they sure as hell aren't going to outsource their service people, or their own sysadmins. Do you think they're going to fly them in from Russia every time something goes wrong?

What incentives are there to not outsource? None. None at all. Then again, what incentives are there to have run a business in this country PERIOD? Absolutely none. Yet people do it all the time.

What's going to happen when it's accepted that outsourcing is good for profits? Low-level shit jobs will move overseas. Low-level shit job workers in this country will have to find other avenues of revenue. I suggest you look up the Industrial Revolution and see the impact it had on the workers then.

Re:My Game Plan

[NanoGator]

"I also anticipate that the federal, state and local government will want to tax me at a total rate of:
2004 - 50%
2010 - 60%
2015 - 85%
2020 - 90%
2050 - 90%"

Yeah, I play Master of Orion too. Seriously this will never fly. Despite the USA's firepower, 300 million pissed off people is way too many to handle.

Okay, I'm new here

[Moonpie Madness]

so could someone please explain this parnkster first post stuff? I can see a troll doing this once in a while, but there is an all out campaign of profane, idiotic, and just incomprehensable stuff...in every single article. It seems like an inordinate amount of work to do in order to have a few jollies. I want to know if it is a bot or if someone really dislikes slashdot or what. Think about what you are doing.. if you are doing this. You are wasting your time and energy to make Linux users (generalizing) look like kids. There's got to be something else out there you'ld like to effect. That kind of communication campaign could make a difference in a political issue you care about. Anyway, outsourcing seems like a fine thing to do to improve a world where people are starving. I don't see america as suffering that badly. I only hope social reforms accompany the outsourcing. Sometimes it does, sometimes it doesn't.

Re:Awesome!

[GileadGreene]

...wanting to protect the way of life of the average American...

Protectionism won't work. All the wishful thinking in the world won't change the current economic reality. If US companies are prevented from outsourcing to take advantage of cheap labor then companies that can take advantage of that cheap labor will grow up outside the US. Those companies will, unless blocked from US markets, undercut the US competition, which will eventually go out of business. If the outside competitors are blocked from US markets then their US customers will be forced to use the higher-priced American products, thus making the customers unable in their turn to compete with their foreign counterparts (who do have access to the cheap foreign products). "Protect" one industry, and others will suffer. "Protect" them all, and you will have essentially isolated the US from the entire rest of the world, and locked it into high prices and low standards of living. Is that really what you want?

I personally cannot wait for the day when we'll be able to punish the greedy.

Bet there are plenty of people in the world who have exactly the same thought. Except that they most likely include you in the "greedy" category, since you're (I'm inferring from your post) an American. Be careful what you wish for...

Re:Awesome!

[MechaStreisand]

Hey, Son of Tard! I never said that it's a new thing that businesses do whatever they can to cut costs. What is a new thing is that they can lay off ALMOST EVERYONE to save costs. Because of today's communication technology, it's possible to have everyone but management work in India or wherever is cheaper and have just as much control as if they worked in the US.

"they still need their designer here. They still need the main coders here."

Really? Why? Is lead programmer something Indians are incapable of doing? I hardly think so. Even the designer could live completely in a foreign company. They could all be contractors for a distributor in the US. Perhaps there's an advantage to having a game designer who's part of our culture, but that's not always the case.

As far as IT companies go... With most computing work done overseas, what is there going to be for them to do around here? Not nearly as much... And those are SERVICE JOBS which are what I said would stay. Menial tasks. No design, that's all gone. You can fix a computer, but you can't write software. Why not just drive a truck?

These are actual good jobs that are disappearing. Jobs that people want.

Then again, what incentives are there to have run a business in this country PERIOD?

What? Are you serious? How about... if you're good, and lucky, you can become rich! How's that for an incentive? But wait, you say, why not start a business in India, if it's cheaper there? Well, if you're rich, and the US is your home, why the hell would you want to live in India? From all I've heard, it's a pretty shitty place to live. (And stating facts isn't racist.)

There is no reason to assume that low-level shit jobs are all that's going to go overseas. Like I said: today's technology makes it easy to make almost ALL high-level jobs overseas, where they can be done by people who can live like kings off of salaries that would reduce people here to starvation. Even if new industries will spring up, there's no reason that people overseas can't do those jobs, too! They have smart people over there, you know!

What will be left?

Re:Shoot the damn horse.

[PainKilleR-CE]

I couldn't agree with you more (until the last paragraph, but I'll get to that). Ten years ago I was in high school, so I can't exactly say that I'm better off than I was then, because it's almost a given. However, just over 5 years ago I was starting off in the same job I hold now, and today I make almost twice as much as I did when I started (which isn't bad since I was making more than any of my friends or anyone I knew my age when I started), and all of this after having shifted school from a full-time to part-time portion of my life.

Of course, to keep my job without taking another position in the company I had to move across the country, to an area where cost of living is significantly lower (then again, the only way I could've moved to a place that had a higher cost of living would've been a move to Silicon Valley or New York City). It's been a little rough, but overall it's cheaper to live out here and I've seen a significant increase in pay in the last 2 years (part of it an incentive for moving).

Since I moved to the east coast, I've had far more work than I ever had on the west coast. If I had the power to do so, I'd probably hire two more people just to get it finished in a reasonable time frame and to help with maintenance. Unfortunately, they don't want to do that, because they only see the work that's currently slated to be done, not the work that may be coming down the road, or the other work that needs to be done and is being neglected.

As for the US remaining the economic leader or not, I think it depends on where things go from here. Some people think that getting things "back on top" will simply require the "next new thing", but I think the dot.com crap can actually work for the economy if they can use it intelligently. You don't invest millions of dollars into a company with no business plan just because 100 other companies have made money for stock-holders the same way. Inflated stock with no underlying value in the company is exactly what it sounds like, and someone's going to get burned on it somewhere (otherwise, you won't have anyone to sell your stock to and it will be you that gets burned). Now everyone's got a web site and you can do more and more of your business online, or your purchases from home, or anything else you might do that involves business.

As with every new technology, though, we tend to make things easier to the point where low-skilled labor can take over the jobs that used to be high-tech and correspondingly high-paying. Even in the case where truly high-tech jobs are going outside the US, like the story this is all attached to, it's still a very limited export, as there are only so many groups in this world that are well enough known for their capabilities for any publisher to go to them to get work done. id Software has certainly been responsible for development work on more games than these guys in Russia are likely to have put their hands into, but you can't go to id Software and say "build me MS Flight Simulator 2010 and I'll give you $1M". They just won't do it. There are a handful of development companies in the US that work that way, most of them are not well known, and most of them are already owned by one or another of the publishers.

Call-centers in India are outsourcing real jobs from the US, real jobs that pay US employees $5-15/hour, depending on the type of work and the level at which they sit in the call hierarchy. Most of the people I know that have done that kind of work would rather do anything else, and turnover rates are extremely high (meaning most of them do find something else to do). Out-sourced developing is going to remain on a limited basis until development houses are built around the world specifically for this purpose. In order for an American company (or companies) to compete with that, you'd have to have a development house built with a focus on code reuse and willingness to build just about anything for a small price, with reliable schedules (something most developers can't do).

Finally, US unemp

Not the last thing to happen in PC gaming.

[Qbertino]

This is not the last thing to happen in PC gaming.
The gaming industry is one that can get away pretty easyly with a high throughput of titles, because gamers always want the new and shiny with more polygons.
I expect the gaming industry to take a hit as soon as OSS gaming engines and tools like crystal space or Blender get a grip. We'll have games for free, the mod community utilizing them (they work for free allready) and the money will be made in providing not a game but the service around it: Servers, special distributions (just like Linux), gaming leagues, high quality mods, automatic online updates - think 'Loki Linux Installer' which makes maintaining UT under Linux easyer thatn under Windows - and other stuff like that.
Closed Source Games are going to be the last thing to experience the OSS impact, but they're going to feel it nonetheless.
In fact, this outsourcing thing is a shure sigh for a local industry to get moving into service rather than pushing for cheaper production. No way can anyone in Europe or the US outprogramm a slavic, indian or far-east programmer for the same amount of money. As soon as people hereabouts will get that, the pain will stop.

A Guitar tech is not exactly rocket science

[ph1ll]

How many hours did it take you to learn to be a Guitar Technician?

Some of us spent years at university to study for our profession, you know.

I can't keep doing a degree in the latest new trend. I'm just glad I don't live in America - where business and politicians seem intent on sending high-paid jobs abroad.

Why doesn't the government there realise they will have less tax returns and more social costs if this trend continues?