The Malaysian Studio That Got Full Creative Freedom on a Sonic Level — and Never Got That Call Again

Source: GDC | Published: 2026-09-25T16:00:26Z

Sam Carlisle once handed a Malaysian studio complete ownership over a Sonic racing level. Twelve years later, he went back to visit — and both studios told him the same thing: no one had ever trusted them that much again.

Five or six years ago, he made a point of going back to Johor to see what those studios had become.

Two of them gave him the same answer: after that project, no one had ever given them that level of autonomy again.

The difference between outsourcing and co-development isn't the vendor relationship — it's ownership

In Sam's framework, traditional outsourcing runs on a time-and-materials logic: you get paid, you deliver assets or a specific deliverable. The other party is a vendor, you're the client — clean and transactional, but distant.

Co-development is different. The partner lives inside your version control system, works in your engine, and has genuine ownership over the part they're responsible for. Sam spent years as Director of External Partners at Microsoft Xbox, and his summary of the distinction is blunt: integration depth and ownership depth are the fundamental dividing line.

Co-development can be purely art, purely engineering, or both. But in any form, the partner isn't just taking tickets — they're making the game with you.

Why studios hate admitting they need outside help

Sam draws an analogy to film. Before a movie shoots, the conversation goes: this crew handles cinematography, that one builds sets, they've worked on these major productions — we're assembling the best talent to make something great.

In games, the same conversation often sounds like: we're short on resources here, we're not strong in this area, the budget's a bit tight — so we need to bring in outside people.

"Outsourcing" in this industry carries a whiff of desperation — it's a pressure valve, a last resort, not a deliberate choice. Sam thinks this attitude is fundamentally wrong, and it directly shapes outcomes. If you go in with a "we have no choice" mindset, you won't bother working through the feedback loops, communication cadence, and relationship management that should have been established before the engagement even started.

The phrase "content farm" — he has no patience for it

A developer working at a studio in Malaysia is doing the same work as a developer at an internal studio — same tools, same contribution to the game. Sam rejects the "content farm" framing outright. Where exactly is the line? At what point does someone stop being a developer? Is it geography? The format of the employment contract?

His position is clear: the perception that "outsourcing is low-end work" is a direct consequence of how the industry has historically treated outsourcing as a release valve. When you treat people as emergency tools, you don't respect them, you don't give them decision-making room, and you never give them the chance to prove they can handle more complex work.

Those two Malaysian studios proved twelve years ago that they could handle end-to-end level development. Twelve years later, no one had given them a second chance.

When evaluating partners, quality is a secondary criterion

Sam's process at Xbox was: a need arises, shortlist four or five studios, narrow to two, negotiate in depth, make the call. It looks like procurement, but what he was actually evaluating wasn't the portfolio.

Quality matters — but it comes after relationship quality.

By relationship quality, he means: does this studio have the confidence to tell you when something goes wrong — not after the problem has spiraled, but before it even becomes a problem? Co-development is far more demanding than standard outsourcing. The client is opening up their IP and dev environment to an outside team, and the client team can't afford to invest significant time in managing the relationship. The partner needs to handle most things independently while knowing how to surface the blockers that actually matter.

Picking a quiet partner who won't speak up costs far more than picking one whose portfolio is slightly weaker.

Time zone overlap is more subjective than you think

Sam raised the time zone question, but his advice wasn't "find someone close to your time zone." It was: figure out your own comfort zone first.

Some studios have made cross-time-zone collaboration a genuine competency — they have async workflows, documentation standards, and handoff processes that work smoothly even with nearly zero overlap. Others haven't built that muscle, and the same working style will be painful for both sides.

So the question isn't "how far away is this studio?" It's "do the two of us, together, have the capacity to manage this distance?"

For co-dev studios looking for work: don't try to cover every category

Sam's advice here is counterintuitive: don't try to be a studio that does everything.

From a buyer's perspective, a studio that says "we do it all" is actually harder to evaluate — you can't tell where their real strengths lie. Specializing in a specific type of project — a particular art style, a specific kind of engine work, a specific scale of level — makes you easier to remember in that space, and the first name that comes to mind when a relevant decision needs to be made.

Engagements typically start small and expand as trust builds. The size of the first project doesn't matter. What matters is accumulating enough trust in that engagement that the other side will hand you something more significant on the next one.

More stable than working at a AAA studio — a counterintuitive claim

The past few years have seen relentless layoffs across the games industry. Sam is direct about what this means: the implicit commitment between internal studios and their employees is gone. A product can be great, a project can ship successfully, and you can still get cut.

External development studios are structurally better positioned on this front: they serve multiple clients simultaneously, so if one project is canceled, others are still running; if one project winds down, you can rotate to something stylistically different and keep growing. Not having all your eggs in one basket isn't just a financial benefit — it protects the people, not just the balance sheet.

This isn't to say external studios have no risk — competition is only getting more intense, with more and more studios adding "co-development" to their name. But at minimum, your stability doesn't hinge on a single publisher's single project.

What XDS Spark is trying to build: closing the information gap

What Sam has been working on since leaving Xbox is essentially this: taking the internal database he built at a large organization — who's doing what, who's doing it well, who fits which kind of project — and turning it into a publicly accessible platform.

Independent studios typically don't have a dedicated person scouting the market, building a network, and maintaining a partner list. XDS Spark wants to make that capability available beyond large companies. The platform is free for developers, including indie studios.

He also pointed to a bigger picture: the games industry needs to find sustainable ways to operate, and external development and co-development are naturally embedded in that path — they let studios complete large projects without massively scaling up full-time headcount, and wind down without massive layoffs when projects end. Sustainability isn't an abstraction. Getting this right is one of the paths toward it.