China's share of the world's outsourcing market will be worth over $1.3bn next year, says a report from a leading US research firm.

Chinese outsourcing set for $1.3bn boom

In a paper examining the Chinese games market, Pearl Research in San Francisco has earmarked outsourcing in the region for a big boom by 2008 as publishers and developers look to offset the costs of game production by up to 20 to 40 per cent.

But while more money will be spent in the region, Pearl warns that the savings aren’t as high as some expect as travel, training and project managment costs all eat away at the bottom line.

“The game development industry is relatively young in China, at less than five years old. Most companies outsourcing to China must develop training programs to ensure their staff is capable of handling outsourcing work. Intellectual property protection is also a concern,” says Allison Luon, MD of Pearl Research.

However, overall the report pinpoints China as a key region for games development given the growing cultural significance of the pasttime – casual games specifically have gained traction, says the report, and MMOs are more popular than ever.

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