Should you work on your own games as an external development studio?

External development (exdev) studios face a constant strategic dilemma: should they stick strictly to contract work for other companies, or should they develop their own original games? As reported by GamesIndustry.biz as part of its "ExDev Week" in July 2026, the industry remains deeply divided on the matter. While some studios, like Envar Studio—which released its own game, Witchspire, earlier in 2026—embrace original IP development, others warn that straying from a pure service-based model can introduce severe operational risks.

The Benefits of Creative Freedom and Skill Growth

Proponents of internal projects argue that creating original titles is vital for keeping development teams motivated and sharp. Working exclusively on third-party games can sometimes limit a developer's creative input, leading to burnout. Bryan Freitas of Redcatpig explained, "I think it's incredibly important to work on your own projects... There's only so much you can do to make an external project feel like your own. Work on enough of them without your ideas moving forward, and you'll drift toward demotivation fast."

Beyond morale, internal IP development acts as a practical training ground. João Toste, also of Redcatpig, noted, "These projects give us the opportunity to apply learnings and grow our skills". This hands-on experience with end-to-end game production can ultimately benefit a studio's external clients by fostering empathy for the challenges publishers face. Furthermore, James Oates of Sumo Digital highlighted the mental benefits for developers, stating, "There's a lot of value to be gained from the occasional creative palate cleanser".

The Risks of Resource Drain and Divided Loyalties

Conversely, many industry veterans caution that pursuing original IP can jeopardize a studio's financial stability. Unlike contract work, which relies on predictable milestone-based payments, self-publishing is highly speculative. Joe Harford of Airship warned, "I'd be cautious of the romance of owning IP, though. For a service studio, it can quietly become a trap. It eats resources, time, and money, it pulls your focus off the service that actually pays everyone, and taken too far, it puts you in competition with the very clients you're meant to be supporting."

This division of focus can also damage client relationships. Studios like Tanglewood Games argue that internal projects can split a studio's loyalties, potentially making clients feel they are not receiving undivided attention. To avoid this, some firms choose to specialize entirely. Stuart Muckley of Code Wizards explained, "We believe that we need to focus on what we do best," maintaining a clear identity as a dedicated service provider. Similarly, Rob Hewson of Huey Games emphasized their client-first approach, stating, "We put our clients and our external development work first."

No One-Size-Fits-All Solution

Ultimately, the decision to develop internal IP depends on a studio's unique business model, risk tolerance, and long-term goals. While some service providers maintain a strict boundary, others view internal projects as a natural evolution. For instance, CodeDev has indicated that while they currently focus on external contracts, they may transition toward developing their own IP as the studio continues to grow.

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