Video games began as a loner’s art. Ralph Baer created a Ping-Pong game, the basis for Atari’s Pong, while working in a one-person room for a Defense Department contractor. Steve Jobs tricked Steve Wozniak into making the prototype for Breakout in four sleepless nights on Atari’s factory floor. Today, designing a video game is far more complicated; it takes a half hour to get through the end credits for Grand Theft Auto V.

In the summer of 2006, a staffing firm hired me to work as a quality-assurance tester for one of the world’s biggest game publishers. I made a little less than twelve hundred dollars a month, after taxes, with no retirement plan. The temp agency offered health insurance, but the cheapest option cost about three hundred dollars a month, which was about what I had left after paying rent and transportation costs. When a deadline approached, we would work up to twelve hours a day, seven days a week, with one mandatory day off every other weekend. By early November, when most of the games had been released, two-thirds of my department was laid off, with only a small skeleton crew left to work on patches and start testing the following year’s games.

It was a quietly brutal time in my life. Like many of my co-workers, I felt lucky to be working in an industry I loved so intensely, and glad to be learning new things about how games were made. But every month I slipped a few hundred dollars further into debt, sleeping four or five hours a night, living on cheap fast food, and walking into the office at the start of every week dreading that I would be next in line for layoffs. Even with our small paychecks, we were seen as too expensive. If the company could have gotten our work done more cheaply, it would have.

I left in 2007, for a job writing about video games. It turned out that I had experienced the beginning of a big transformation in the game industry. Like many other companies, video-game makers were beginning to deal with the complexity and cost of their operations by relying on outsourcing—by using both temporary workers in the United States, like me (I was never technically an employee of the company where I worked), and people in low-wage developing countries.

Game Developer Research found in a 2008 survey that eighty-six per cent of game studios used outsourcing for at least one aspect of development. In 2009, Electronic Arts laid off more than twenty-six hundred employees; the C.E.O., John Riccitiello, said the company had overinvested in internal development and vowed to increase focus on outsourcing. “The high-cost locations have gotten so far out of line that the best we can do is keep a core design team there, and use support in other places like Montreal or South Korea,” he told investors at a 2009 presentation.

The outsourcing boom comes at a time of increasing uncertainty for the video-game industry; software sales have declined year over year since peaking in 2008. Earlier this year, Square Enix acknowledged that both Tomb Raider and Hitman: Absolution, even with more than three million units shipped worldwide, did not meet the company’s sales expectations, resulting in the resignation of its president, Yoichi Wada, and major layoffs. Last year, THQ struggled to stave off bankruptcy after the games Homefront and uDraw, in which it had invested heavily, failed to sell; the company’s game properties were finally auctioned off in January.

There are a lot of reasons for this trend: the global recession, the sudden collapse of the Wii-game market, and the rising number of alternative platforms where games can be had for little or no cost. Simple games like Brain Training, Harvest Moon, and Super Monkey Ball are harder to sell on consoles now that cheaper (or free) variants have emerged for smartphones, tablets, and Facebook. Meanwhile, Valve’s PC-based Steam platform hosts a huge library of unconventional titles like Gone Home, Shelter, and MirrorMoon EP. To compete, console-game makers have doubled down on what they do well: designing bigger, more spectacular games that the small, tablet- and phone-focussed studios can’t offer. But this has created a financial tourniquet, requiring bigger investments in games even as their sales are less certain.

Outsourcing helps keep costs down and spreads the work among more people. Streamline, an art-outsourcing company, has made art for everything from the popular Saints Row series to BioShock Infinite, which Chris Suellentrop of the Times called “a model of what the medium can achieve.” Streamline employs thirty-six full-time employees in its Malaysian office and expects to double that by the end of 2014. Most of its artists are based in Kuala Lumpur, which allows the company to pay lower wages while taking advantage of a relatively well-educated population that is also well-versed in American popular culture. According to its C.E.O. and co-founder, Alexander Fernandez, Streamline had twenty artists working full-time for thirteen months to help create BioShock Infinite’s lushly detailed city in the sky.

These days, many developers have an internal art team of about five people, who hire dozens of short-term contract artists to help add detail to the game’s world while also coördinating with outsourcing companies to make whatever can’t be done internally, Fernandez told me. “Seventy-five per cent of the manpower required to produce these games is visual,” he said. “So outsourcing art is always the first thing you’re going to look at.”

It’s not hard to find reports of poor working conditions and low pay in the video-game industry. Foxconn has admitted to using unpaid interns from Xi’an Institute of Technology to assemble the PlayStation 4, assigning them night shifts and overtime hours in exchange for school credit. Similar charges surfaced last year about the assembly of Nintendo’s Wii U console. The working conditions in the cubicle of an art-outsourcing company are likely more bearable than those on an assembly line, but there are signs of discontent. Employee reviews on the Web site Glassdoor reveal satisfaction with office conditions and enthusiasm for the work, but also include complaints of being underpaid.

At the same time, many companies pride themselves on helping their employees improve their lives. Glass Egg Digital Media, a Vietnamese outsourcing company that has worked on games including Need for Speed: Most Wanted, Forza Motorsport 4, and Battlefield 2: Modern Combat, says it runs a continuing-education program to help workers develop their skills. Phil Tran, the company’s C.E.O., told me in an e-mail that his company has its own training facility and collaborates with local art schools.

At Streamline, Fernandez says, “You get the spirit of a startup with people who want to aspire to something beyond just laboring in fields.” Malaysia has become one of the biggest economies in Southeast Asia, but only in the nineteen-seventies did it begin moving away from mining and agriculture. Many of Streamline’s workers come from farming families, sending money back to the countryside with each paycheck. “I’m not a hippie,” Fernandez told me. “We have to make money. If we don’t make money, we die. That’s a reality of life.”

Photograph by Juergen Schwarz/Getty.