Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

Could we start with a brief description of your experience in the video games industry?

Certainly. I began my career in the outsourcing world in 2006, spending most of my time with a company called 5CA. 5CA is a Dutch company specializing in player support or contact center services. Approximately 85% to 90% of their clients are video game companies. As part of the management team at 5CA, I helped the company grow from around 200 people when I started to two and a half thousand when I left two years ago. I was always responsible for sales and marketing. I led a team that managed client relationships. All the video game companies that were clients of 5CA were managed by client success managers. We were responsible for client acquisition, new business development for 5CA, and marketing. Much of it was specifically focused on video game companies because of our large client base in that industry. Over time, we grew the business and worked with a wide variety of video game companies, ranging from smaller ones to some of the biggest in the world.

What service lines did you sell there? Was it focused or did you have multiple ones and how did that develop?

Our main focus was player support, essentially customer service for gamers. This included account and billing support, so if gamers had any questions or issues with payments or their accounts, they would go to support to have that resolved. We also dealt with technical issues, such as game compatibility or any other technical problems that would arise. We also answered gameplay questions, for instance, when players got stuck in a game and didn't know how to proceed. We did some community moderation and even some technical services like server monitoring. As you can imagine, for a game that operates live, there's a live operations department that needs to ensure all the servers are up and running at all times. If a server goes down, it impacts the functionality of the game. So, we also provided 24/7 server monitoring for some of our clients, but most of our work was really focused on player support.

That's extremely helpful. Could you give us a sense of some of the example customers that you worked with? You mentioned some larger and smaller companies, just to familiarize our readers with the types of customers you served.

Some of our larger clients included Epic Games, specifically for Fortnite, and 2K Games, which is part of the Take-Two family. Take-Two has two labels, 2K and Rockstar, and we worked with 2K. Their most popular game is NBA 2K, the basketball game, but we also supported various other titles. We worked with King, a well-known mobile gaming company famous for Candy Crush.

Other gaming companies we worked with include CCP Games, an Icelandic company that has a big MMO called EVE Online, and some smaller gaming companies like a mobile gaming company called GrandGames. Activision Blizzard is also a client that I worked with extensively.

That's interesting. Could you describe the approximate size of a typical deal? What scale are we discussing?

The size varies from one client to another. For our largest client, we had around 1,000 people working on the account. However, most of the accounts would typically range from ten Full-Time Equivalents (FTE) to around 200 to 250 FTE.

We also serviced very small clients with shared resources, a flexible offering where one agent could be assigned to multiple clients. Depending on the tickets that come in, the agent would switch to the client's account. But most of the clients would have dedicated teams, ranging from anywhere between ten to 250 FTE.

Are we talking about contracts worth $100,000, or are these multimillion-dollar contracts?

If we're considering annual revenue, then yes, these would be multimillion-dollar contracts.

I'd like to move on to the customers now to understand more about how that works. Let's say I'm Activision Blizzard and I've released a new installment of Call of Duty, and I'm looking to outsource some of my player support services. How does that process start?

Typically, a company begins by creating a long list of vendors they wish to evaluate. This list usually includes vendors they're already familiar with, from the supplier's perspective. It's essential for us to ensure we're included in this long list, which is the main purpose of our outreach. We introduce ourselves, ensuring companies are familiar with us and include us in their vendor evaluation.

Companies often conduct additional research into new vendors that have emerged since their last evaluation. They then narrow down the long list to a short list, deciding which vendors to invite to bid for their business. They usually create an RFP, RFQ, or RFI, depending on the structure they wish to use, and send this document to relevant vendors for their responses.

These responses typically include information about the vendor's company, culture, experience, pricing structure, and general structure for delivering services. Some companies are very specific about their requirements, while others pose more open-ended questions, asking for advice on achieving their goals and the proposed operational structure and cost.

How many companies typically receive the opportunity to bid from the shortlist? How long is this shortlist usually?

The number varies, but usually, I would say between five and ten companies typically bid for such a project.

That's still a relatively large number. Do you know how the selection process goes from the long list to the short list?

The first step in the process is to create a long list of potential companies for the Request for Proposal (RFP). Based on my experience, there is another selection phase where the list is narrowed down from five to ten companies to maybe two or three. These selected companies get the chance to present their solutions, followed by a final negotiation for a final bid. The company then makes a choice.

The initial selection from the long list to the short list for the RFP is based on the company's own research, expertise, and knowledge. This could be influenced by familiarity with a company, confidence in their work, or their specialization in the required service. Some companies might be ruled out due to lack of knowledge about them or if they don't specialize in the specific service needed. This selection is based on a subjective review.

The second selection, from the short list to the final bid, is typically based on different factors determined by the company. These factors would include pricing, flexibility, and quality. Flexibility is crucial for gaming companies as the launch of a new game is unpredictable. It's not like launching a new headset where you can predict the number of units you will sell. With games, it's different. You can make a prediction, but you never know what's going to happen. It could be a huge success, a failure, or a success with major issues requiring more resources. So flexibility is key.
Quality is measured by the service levels they offer, the feedback they can provide, their cooperation with my team to ensure we get the right feedback from player support, their experience with similar companies, and their ability to vouch for the quality of service they can deliver.

Going back to the decision-maker at the video game publisher, who is that person typically within the organization?

The decision-maker depends on the size of the organization. For larger companies like Epic Games or Activision, they have dedicated vendor managers responsible for the selection and execution of their outsourcing strategy. In smaller companies, the responsibility typically falls on someone in player support, such as a director. In the case of small mobile gaming companies, it could be the Chief Operating Officer or the Director of Operations.

In terms of service lines, how focused are the vendor managers in their job?

The focus is primarily on service lines. For instance, there would be a vendor manager at Activision or Epic Games who is specifically focused on player support. There would likely be a different vendor manager for game testing and localization. Sometimes these roles may be combined, but in most cases, they are separate due to the need for subject matter expertise to strategize and execute accordingly.

That's interesting. Are these contracts issued on a project basis? Or is it done more centrally? Actually, never mind. I think you already answered that question. But returning to the selection criteria, you mentioned four of them.

What is the difference between a more focused vendor like 5CA and a more diversified vendor that offers multiple service lines?

The significant advantage of being a single service vendor is, of course, your focus. This includes the expertise and consequent positioning that you do around this service. For example, Keywords have their service line departments that are focused on developing those services. But in terms of overall marketing, they would take a more general approach. It's a bit of everything. If you look at single service vendors like 5CA, they would really focus all their marketing, all their efforts on that single service. So in terms of positioning, that would be an advantage. On the other hand, the significant advantage that companies like Keywords have is that if they already do business with the client in one service line, it would be relatively easy for them to talk to that same client about a different service line. Historically, in the gaming industry, there are also a lot of companies that appreciate the convenience of doing business with one vendor for different service lines. It's convenient. You only need to have one contract. You only need to have one negotiation in terms of contractual terms and conditions. So that would definitely be a big benefit for multi-service vendors.

How long are these contracts typically?

In terms of player support, we would typically have agreements lasting one to three years. However, there would be a fair amount of flexibility within those contractual agreements. As I mentioned before, flexibility is key. Unless you're a huge company and you know for sure that you'll have enough volume for the next years to guarantee that commitment to a vendor, you want to build in flexibility. So you can ramp down whenever you need to, or you can even cancel the agreement within the contractual term, maybe at a cost of a penalty. But most companies would want, if they sign multi-year agreements, they would want to have an opt-out clause in there. That's very typical of the gaming industry. In my experience working with companies in different verticals, that would be less common, and it would be much more common to have multi-year agreements with a certain minimum commitment throughout that term and without the option to cancel the agreement within that term. In exchange, a vendor would be able to offer them much more competitive pricing. Of course. If you sign with your mobile phone company, if you sign a two-year contract, they offer you better rates than if you have a month-to-month agreement. So it's a similar way of working.

You've mentioned that player support typically lasts one to three years. How does this compare with other service lines?

From what I've observed and learned about other service lines since I left 5CA, and began consulting with companies offering different services, the duration varies. For instance, game testing and localization often involve short-term contracts. When a game is being launched, it needs to be tested and localized before going live. This process typically takes anywhere from one to six months, depending on the game's complexity. These contracts are broader and focused on completing a specific job.

On the other hand, community moderation is similar to player support. It usually involves multi-year agreements and requires a significant commitment. It's a type of service that isn't frequently changed as it impacts the quality of service delivered. Typically, a vendor is chosen for this service and the company sticks with them, or maybe multiple vendors if dual or triple sourcing is involved. Unlike UA and Localization or other game development services, where it's more common to work with different vendors and switch around.

How do you approach selling your other services? 5CA also offers community moderation. How do you propose this service line to an existing client?

The first step is always to build trust and credibility. If we start with player support for a company, or even take a step back, we often begin with a pilot or small engagement based on a specific set of languages or a specific game that we support. We first have to prove that we can deliver on the promises we make. Once that trust is established, a company is usually more open to expanding the scope of the service. This could mean increasing the FTE for the same language, adding more languages, or supporting other games.

Once the company sees that we can efficiently scale up and down and maintain a healthy business relationship over time, they are usually willing to discuss other service lines, such as customer safety, community moderation, translation services, and more. However, we first have to establish our credibility and trustworthiness before we can expand and offer different services.

That's interesting. What are the differences between the AAA publishers and the smaller publishers when it comes to penetrating the accounts?

The main difference lies in the budget. Publishers have a larger budget for their games, which provides them with more flexibility, especially when it comes to player support. For smaller companies, based on my experience, player support is often overlooked. Most of their time, effort, and budget is spent on developing the game, ensuring its quality, and implementing the right dynamics and mechanisms for success. Once the game goes live and proves successful, they realize the need for better player support due to the influx of tickets and questions. At this point, they would approach us or other companies for help.

However, AAA publishers handle this differently. They plan properly and often select more than one vendor to avoid putting all their eggs in one basket. They rely on different vendors that they can scale up or down based on the quality of service delivered or the actual volume of incoming requests. This is a significant difference between AAA publishers and smaller ones.

That's very insightful. Going back to the basics, why do video game publishers want to outsource in the first place?

Most of them outsource a large portion of the work. Most gaming companies prefer to focus on their core business, which is creating and publishing good games. They typically outsource development-related services such as coding, animation, art, and sound. After the game is published, they need player support and customer safety, most of which is outsourced.

They usually have a small in-house team that manages the service, sets the strategy, and handles internal alignment. But they work with one or more vendors to execute the service. There are exceptions, like Blizzard, which traditionally does most of the work in-house. However, even they have started outsourcing more in the last three to five years to save costs and increase flexibility and quality.

How does the labor market influence the demand for outsourcing services?

Indeed, the past few years have been challenging in terms of the labor market. It's not only difficult to attract talent, but also for gaming companies to navigate the industry's dynamics. There are times when a large workforce is needed for a limited period, then the demand decreases, and then it rises again. Managing these fluctuations, especially with in-house hiring, is complicated due to local labor regulations and laws. These often make short-term contracts difficult or costly. Outsourcing allows companies to take advantage of lower-cost locations and more labor flexibility, making it easier to handle shifting staffing demands. The labor market certainly plays a significant role here, as it's burdensome for gaming companies to manage this scaling up and down. Working with vendors who specialize in sourcing people can simplify this process.

Why are vendors more flexible? Is it because they can shift capacity across clients, or do they have more lenient labor laws? What makes them so adaptable?

It's a combination of factors. They can certainly move resources from one project to another, which is a significant advantage, although not all companies prefer this. For instance, having a large number of people experienced in mobile games doesn't necessarily mean they can support an MMO game. However, there is more flexibility due to the ability to shift people between different clients. In my experience, the company I worked for, 5CA, was a major proponent of remote work. They could hire from 80 to 90 countries worldwide, each with its own level of flexibility and capabilities, such as language support or working hours. Based on each client's requirements, they would select the best locations to meet those needs. In some countries, it's much easier to scale up and down without incurring high costs.

Another factor to consider is that these outsourcing companies typically have a very efficient recruitment system. This system is designed to quickly find, evaluate, and onboard people. The offboarding process is also smooth, ensuring that the company maintains a good reputation and can rehire these individuals in the future if needed. This efficient system is perhaps one of the most significant factors, as gaming companies often lack such a system. Even if they have one, player support is not their top priority. Their focus is more on the development and publishing aspects of the game rather than player support or moderation. This means that the recruitment department may not dedicate as much attention to these areas, resulting in a slower and less flexible process.

What about unions?

Unions are indeed important, but their significance greatly depends on the work locations. Consider Blizzard as an example. You've probably heard about their situation. When Blizzard wanted to reduce their workforce in France, they faced significant challenges. Eventually, they managed to do so, but it was a costly process for the company. This experience was a major factor in their decision to continue their growth, adding more staff. However, when they needed to downsize, they realized how difficult this was in their current locations. As a result, outsourcing became a more attractive option for them. This doesn't imply that outsourced workers are treated poorly or valued less, but it does provide more flexibility in terms of location.

Furthermore, an increasing number of people are open to working on a temporary or less stable basis, a practice common in the US. In the US, employees understand that they can be laid off without notice. This is just a reality of life there. In Europe, this would be almost impossible, but outsourcers often operate in locations where short-term contracts are common, providing them with more flexibility in their dealings with these companies.

Over the past decade or two, what role has the trend in content production played?

Could you clarify what you mean by the trend in content production?

I'm referring to the increasing amount of content and how publishers have been utilizing outsourcing services to support this growth. How have you seen this trend develop?

Just to ensure I understand your question correctly. Are you referring to the increase in the number of video games being published?

Yes, I'm referring to the increase in the number of video games, rather than the money spent on them.

Yes, indeed. The shift has significantly impacted outsourcing demand. As companies transition from producing fewer high-quality games to more games of slightly lower quality, they require additional assistance with both the development and after-sales processes. This change has influenced outsourcing demand.

Additionally, the increase in the number of games has significantly affected how gaming companies perceive player support. A decade ago, player support was primarily a cost center, more of a burden than a benefit. However, due to increased competition, player support has become increasingly important as it contributes to a positive player experience.

If a player enjoys a game but encounters an issue that isn't resolved, they may stop playing. A decade ago, players had fewer options and were more patient. However, if a problem isn't fixed within a day in the current gaming landscape, players are likely to uninstall the game and move on to another. The increase in available games has significantly impacted how companies view services like player support. It's no longer just a cost center; it's a way to differentiate themselves from other gaming companies and ensure player satisfaction, leading to better retention.

You've already mentioned how live services and operations have become prominent in the industry. How has this affected outsourcing over the last decade?

It's affected outsourcing in a similar way. If you have live operations, you need to ensure that support is available 24/7, and that moderation and server monitoring are happening round the clock. For many gaming companies, accommodating this in-house is challenging. They want to avoid graveyard shifts and managing services in different locations can be difficult. Outsourcing companies have more experience in this area.

When a company needs to transition from support available from 9 a.m. to 5 p.m., Monday to Friday, in their local time zone, to providing services around the clock, outsourcing becomes a more viable option. In some cases, this means outsourcing everything. In others, a gaming company may maintain an in-house team to cover regular business hours and outsource everything outside of those hours to achieve the necessary 24/7 coverage.

Based on your experience, why have you seen video game publishers switch vendors?

The decision to switch vendors is either related to quality, price, or both. Despite the trend of transitioning from a cost center to a value-added service, pricing remains crucial. A gaming company would typically not change vendors if they are satisfied with their service and the price difference offered by another vendor is within a 20% range. This is because switching also incurs costs and requires significant effort.
However, if a company is dissatisfied and the vendor fails to improve despite repeated warnings or efforts, they would typically issue a Request for Proposal (RFP) or start a pilot with a different vendor. The decision could also be purely quality-related. For instance, a company might be fairly satisfied with a vendor, but they might want to add another vendor to compare the quality of services delivered.

In such cases, they would add a second or third vendor to the mix and have these vendors compete in terms of quality and price. There is one exception to this, and Epic Games serves as a good example. Instead of having vendors compete, they prefer cooperation.

In terms of player support, Epic Games would have two to three vendors worldwide and they would want these vendors to cooperate. They would be on joint operational calls and ensure that the end result benefits the Epic player base, regardless of whether vendor A or B delivers it. They need to work together to provide the best results for their player base.

This is a unique approach that is not common among many gaming companies. However, from my personal perspective, this is definitely the future of how gaming companies should approach this. If vendors compete with each other, they will focus more on excelling in certain Key Performance Indicators (KPIs) or service level metrics, rather than considering what's best for the player.

This leads us to the next question, which is, how are these services generally priced?

The most common method is still to work based on an hourly rate. For instance, a gaming company might require English, German, and French language support, needing 3000 monthly hours in English, 1000 monthly hours in German, and 500 monthly hours in French. The outsourcing company would then be responsible for scheduling on their end. They need to ensure that they deliver those hours and distribute them according to the volume of incoming requests. This way, they can optimize response time and service level.

However, they would bill based on the actual productive hours delivered. In some cases, vendors would charge for agent hours, with additional management or project management fees. In other cases, everything, including the entire structure around the agents, would be included in the hourly rate of the agent and the only calculation at the end of the month would be the number of agent hours multiplied by the agent rate, resulting in the monthly cost.

This is the most common model. In some cases, we also work on a transaction-based model, where the client is billed based on the number of tickets or interactions handled. This means that the vendor is responsible for their own efficiency, rather than it being a secondary metric as it is with hourly rates. Of course, it would still be measured, but it would not impact pricing. With transaction-based pricing, the efficiency directly impacts pricing and, therefore, the revenue attained by the outsourcing company.

What are your thoughts on setting margins?

In my experience, gross margins typically range between 30% to 45%, depending on the size of the project and the contractual commitment. The more firm the contractual commitment, the lower the margin, or the more acceptable a lower margin is. If a gaming company needs to be very flexible and essentially work on a month-to-month basis, with the ability to opt out or scale down whenever they want, a higher margin would be necessary to cover that risk. So, typically, it would be somewhere between 25%-30% and 40%-45% gross margin.

Considering the cost components, we obviously have the agent's pay. Are there any other components that are added on top of that, which are then used to calculate the margin?

Let's assume, in general, that you have all-inclusive hourly rates. For instance, you pay $15 an hour for an English agent, and that includes everything. Therefore, you wouldn't pay anything else on top of that. You would have to account for your direct costs in that hourly rate, such as the agent's salary, additional benefits for the agents, and the staff directly assigned to the project. This includes team leads, workforce management, QA, and the entire management structure surrounding those agents.

If you have brick-and-mortar agents in a physical location, the cost of your facility needs to be included. If your agents work remotely, there would also be costs. Perhaps these agents receive reimbursement for hardware or their office space, and that would be factored into the cost as well. Overhead would also be included in the cost. There are different components, and all of these would typically be a certain percentage of the price, leaving a net margin at the end.

That's insightful. Is there a significant difference in margin between different service lines in the industry?

My experience is somewhat limited as I spend most of my time selling player support. Generally, because player support and community moderation are services that typically last for a longer period, the margin would be slightly lower than with one-off services like localization or game testing. However, I don't want to give the wrong impression. I'm not an expert when it comes to pricing these different services.

How easy have you found it in the industry to raise prices?

It's quite challenging. Companies are very cost-centric when it comes to outsourcing. If you have an existing agreement and you need to increase your prices, it's usually a tough sell. We've been able to do so in the past because of valid reasons like inflation or an increase in the cost base in certain locations from where the services are delivered. However, if you manage to get a client to agree to a cost increase, it would immediately trigger a response from the client to start looking at what different companies could offer for similar services. Clients typically have a budget, and if you ask them to increase that budget, they would not be pleased. They would also have to justify that internally. So, yes, increasing prices is definitely difficult, not impossible, and also easier to sell if they're very satisfied with you. If they're very happy with you and you have the right argument, then you can pull it off, but otherwise, it would be nearly impossible.

Is there a specific number that starts to raise eyebrows or a sweet spot in the range? For example, if it's a 5% increase, they might be okay with it, but if you go over 8%, they might start looking elsewhere.

I believe this is mostly related to the inflation rate. Historically, inflation has been quite low. Therefore, any price increase of 5% or more would certainly raise eyebrows. However, the last few years have been unique, with high inflation rates seen globally. It's then more logical to increase rates, and clients would be less averse to it. Generally speaking, a price increase of more than 5% would definitely cause concern.

We've briefly touched on the advantages of multiple service lines. From your perspective and experience, how does it feel to compete against companies offering multiple services?

Our focus is mainly on being specialists in a single service line, as opposed to companies like Keywords that offer different service lines. They can't be subject matter experts because they focus on various service lines. In terms of positioning, we claim to deliver top-notch AAA quality in player support. Multi-service vendors may provide decent quality across different service lines, but they can't reach that AAA quality because they're not focused on a single service line.

However, I don't think it's impossible for multi-service vendors to deliver AAA quality. It really depends on their internal structure, how much focus they have on that service line, and how big that service line is compared to others.

Could you name some other large multi-service line BPOs? Keyword Studios is one. Are there other names that come to mind?

Testronic is a well-known vendor in the industry for localization QA. Pole To Win is another we often encounter. ModSquad primarily focuses on moderation but has branched out into player support. GlobalStep, a fairly large company, was historically focused on QA and added localization player support. We're seeing more companies that start with one service line and branch out into different ones, mainly for cross-selling purposes.

Why don't they stay focused? Why do they expand?

The primary motivation is the desire to grow and compete with other multi-service vendors. As I mentioned earlier, a significant advantage for a company like Keywords is their business relationship with virtually every gaming company in the world across their service lines. This means that if they excel in a specific service line, they can start discussions about other service lines with these companies. The growth of Keywords hasn't gone unnoticed, and other vendors want to follow suit by branching out into different service lines.

There are exceptions, such as 5CA, which prefers to focus on one thing. This is mainly due to the vision and strategy of the owner. 5CA is a privately-owned company, not a public one, so they are driven more by the owner and CEO's vision and strategy than by revenue. Other privately-owned companies have chosen the multi-service route because their owners have different visions and strategies. Publicly traded companies, on the other hand, are typically focused on growth. This could mean adding different service lines or acquiring companies with complementary service lines.

What trends have you noticed in terms of vendor consolidation? Have there been instances where companies like 5CA have been told that their services are no longer required because the client is working with Keywords or GlobalStep and using them for multiple service lines?

Yes, vendor consolidation certainly happens, particularly with rapidly growing companies that have added more vendors over time to fill gaps. Once growth stabilizes, they begin to consolidate. The outcome of this consolidation can be positive or negative for us, depending on the strength of our partnership with the client.

For instance, Epic Games, which experienced rapid growth and added more vendors after the release of Fortnite, is a good example. At one point, they had around 13 or 14 vendors just for player support. When growth began to stabilize and they brought in more experienced people to manage the service, they decided to reduce the number of vendors to two or three. In 5CA's case, this was a positive development as we were one of the vendors they consolidated with.

In other cases, Warner Brothers Games, which had three or four vendors, decided to reduce their vendors to two, and 5CA was not one of the chosen vendors. The decision generally depends on the strength of the partnership and the vision for it from the gaming company's perspective.

How do you foresee vendor consolidation evolving in the coming years?

I anticipate further consolidation in the industry, largely due to the increasing number of acquisitions and mergers. This leaves fewer options available, prompting gaming companies to be more discerning about their partnerships and consolidate accordingly. This, in turn, encourages the development of long-term, stable relationships, which ultimately lead to better quality and improved outcomes for players.

Could you elaborate on the barriers to entry in this industry?

At present, the barrier to entry isn't particularly high as the market remains fairly open with room for new vendors. However, it's crucial to have a strong focus on the games industry. This isn't a typical vertical that can be targeted casually. Your expertise in the industry should be evident in your positioning and the services you offer. This focus is essential from a marketing and sales perspective. However if you do that, you can grow quite quickly. A good example of this is Arise Gaming, a smaller company that started as a system lab. They were acquired by Arise Virtual Solutions and are now a separate business unit. Their management team hails from the games industry, and their strong focus has allowed them to establish their name and grow rapidly. So, while the barrier to entry isn't high, a strong focus is essential.

Contracts come up for renewal every few years, and capacity may need to be expanded even more frequently. How challenging is it for a newcomer to secure a contract?

It can be quite challenging, especially in player support and moderation, where trust and credibility are paramount. As a newcomer, it's difficult to prove your trustworthiness. Many gaming companies will request references and ask about your experience with other gaming companies. The gaming industry, despite its rapid growth, is still a relatively small world, and establishing a foothold can be difficult. My advice to outsourcing companies is to start small, build trust and credibility, and gradually level up to larger companies. However, if you're new to the gaming industry, don't aim for the top ten or top 20 publishers right away, as it's unlikely you'll secure any contracts unless you have personal connections. Trust and networking play significant roles in this industry.

As we approach the end of our time, I'd like to ask what will drive outsourcing in the next decade.

Innovation plays a significant role in our industry. We're all aware of the latest trends in AI and its impact on the outsourcing industry. This could be a topic for another lengthy discussion. However, innovation is undeniably crucial. A decade ago, it was about finding people who could speak the right language at the right rate and answer tickets. Now, gaming companies want their outsourcing vendors to bring innovation and new ways of doing things, rather than the companies providing the innovation and the outsourcers merely executing.

Innovation is extremely important. Another aspect, which is my personal vision, is remote working. Some companies support this vision, others don't. But I believe remote working is the future. Outsourcing companies that embrace remote working will grow rapidly because they can offer more flexibility than traditional outsourcing companies that operate from physical locations. From a cost perspective, it's more appealing. From a flexibility perspective, it's more interesting.

In terms of talent acquisition, it allows you to source people from anywhere in the world. This helps find people with the right skill set and the passion needed to properly support gamers. From my perspective, these two aspects, innovation and the ability to attract and retain the right talent, will be the key variables driving the growth of outsourcing companies.

Which company in the outsourcing industry is best positioned to deliver on that innovation?

It's challenging to say. Several companies are very focused on innovation. Larger companies like Teleperformance and Concentrix, which is merging with Webhelp, are creating another giant. Teleperformance has just acquired, which is also increasing their size. Companies like 24/7 Intouch, Alorica, and PTech are well-positioned to drive innovation.

However, these large companies with hundreds of thousands of employees worldwide often struggle with agility. It's like a massive tanker in the water; turning it around takes time. Smaller companies are better positioned to be more agile and flexible in terms of innovation, but they sometimes lack financial resources.

In short, it's going to be a combination. The larger companies will certainly be able to innovate in the long term. But I also think they will acquire a lot of their innovation by acquiring smaller companies that excel in a specific, innovative aspect of the service. These smaller companies will then be incorporated by the larger ones, as we've seen in recent years with many acquisitions and mergers.

That makes sense. Keywords recently acquired an AI company. This conversation has been incredibly helpful. I now have a much better understanding of the industry.