This Wall Street Journal article from the Tuesday, February 19th, 2008, edition reflects the movement of the big entertainment companies such as Disney and Viacom to take the development of video games back in-house from what was otherwise an outsourced activity for a number of years.
The question for most of us in business is always what we do in-house versus what we outsource. The parameters of that decision rely on whether the activity is a core process or core value, whether your enterprise has created efficiencies in that particular area, whether it is essential for your enterprise to own the space, and the cost of outsourcing.
In this particular conversation, Disney and Viacom are seeing themselves as having created the underlying creative from which the video game is derived and they also view themselves, although one off, as having the intrinsic capability to occupy the space associated with adapting the creative to a video game context. With that decision, of course, comes the strategic decision to move into that adjacent area (videogame adaptation) that will provide for greater revenue and theoretically greater profits.
As with so many areas that seesaw between being outsourced and in-house, the final outcome is certainly not over in this regard either. We’ll see how it unfolds in the years ahead. Take a look at the article.
Original writing date: February 19, 2008
Article date: February 19, 2008