As I was putting together my presentation for GameBiz 2024 this week, I came across an interesting stat:

I was looking back at XDS’s insight reports over the years and noticed that from 2016 to 2023, the percentage of publishers and developers who claim they source the majority of their partners via internal company resources skyrocketed, from 7% to 80%.

Dramatic change! I find this speaks primarily to two developments:

1) The emergence of dedicated ExDev departments, which have been effective at sharing service provider information between studios. Why source and vet a new partner when you know a quality one is available from another internal studio?

2) The maturation of the service industry in general, as strong internal referrals imply partners have been able to deliver quality work consistently.

Sadly, I also agree this makes the challenge of “breaking into AAA” more difficult for service studios not already in a company’s approved vendor database.

However, an overreliance on known quantities usually means less competition among entrenched providers, leading to higher prices. This could benefit buyers willing to look beyond the established brands.

Another big change seems to be the emergence of direct outreach as a viable acquisition channel, going from 0-2% to 26-30% in recent years.

My bet is this is primarily due to specialization. Providers have become expert at their trade over the years, executing the same service in dozens of different contexts, and have learned to identify their buyers.

That all being said, one acquisition channel remains the same year in and year out: conferences.

Any takeaways I’m missing here?