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5 Things To Know About Winking Studios (SGX: WKS), The Company That Provided Artwork For Games Like Assassin’s Creed, Genshin Impact, And FIFA Online 4

The third-largest art outsourcing studio in Asia.


I fondly remember my first video game, Wolfenstein 3D that loaded using a floppy disk. Its 3D artwork and vibrant colours surpassed the 2D games that came before it. Yet, compared to today’s games, it’s visual elements and experience seem quaint, highlighting the significant leap in graphic quality in recent years.

One of the contributing factors to this advancement is the artwork design of a game, which is outsourced to art studios like Winking Studios. Established in 2003, Winking Studios (SGX: WKS) provides complete end-to-end art outsourcing and game development services across various platforms. With a market capitalisation of around $64 million, it is the third-largest art outsourcing studio in Asia and the fourth largest globally.

Here are 5 things you need to know about Winking Studios (SGX: WKS), the first gaming-related company listed on the SGX.

Tell us about Winking Studios’ business model and revenue segments.

Winking Studios is one of Asia’s largest game art outsourcing studios and an established game development company. We have three main business segments:

Art Outsourcing is our largest revenue generating segment and it provides a comprehensive suite of services to our clients who are game developers. We create and develop digital art assets such as 2D concept art, 3D modelling, 2D animation, 3D animation and visual effects for environment and game character design under this segment.

Game Development offers programming, game development, design and script writing services.

Global Publishing and Other Services is involved in the release of game products produced by our Group and third-party game developers on global game publishing platforms as well as the sale of the Group’s in-house developed video game products and peripheral gaming products.

What are some of the notable projects and game titles that Winking Studios has worked on?

We have collaborated with game developers on internationally renowned game titles and award-winning projects, including Assassin’s Creed, Genshin Impact, Blade & Soul, Destiny 2 and FIFA Online 4, to name a few. Our longstanding partnerships with 19 out of the top 25 global gaming companies have led us to be involved in developing highly renowned projects.

How have disruptive technologies like artificial intelligence (AI) and machine learning changed the way the Group carries out its business, and what are the benefits that resulted from that?

We often come across incredibly impressive images or videos generated by AI technologies. These AI technologies achieve great success because they have access to vast amount of training data and substantial computational power. With countless images and videos available on the internet, regardless of copyright legality, AI technologies have ample opportunities to absorb this content for learning purposes. Subsequently, they can easily produce remarkable images or videos. However, it is essential to clarify that these AI technologies can generate contents which are “pre-calculated or pre-rendered” fixed perspective. Everything appears seamlessly integrated.

But in the gaming industry, artistic assets are primarily in vector formats. Through game engines, these assets construct a gaming world where players can interact with them from various angles, personalised to their enjoyment.

To illustrate this point with a simpler analogy, imagine you’re a real estate developer constructing a building. The construction process involves various tasks such as laying foundations, pouring concrete, installing windows, interior decoration, and so on, all performed by a construction team. When you wish to showcase the completed building to potential buyers, you might engage an advertising or film company to create renderings or videos of the building. This is where AI technologies excel, as long as there are no copyright issues with the training data. As a developer, you could quickly generate promotional videos without relying on traditional advertising or film companies.

However, viewing the video doesn’t mark the end of consumer engagement; it is just the beginning. Potential buyers still need to experience living in the building. Therefore, the actual construction process cannot be omitted. Similarly, in gaming, promotional trailers alone aren’t sufficient; players require an actual game to download and interact with the gaming world and it’s assets and objects.

The proliferation of AI technologies in generating “pre-calculated or pre-rendered” fixed perspective assets is rapidly advancing. In any field with sufficient training data, a super AI emerges, significantly enhancing the efficiency of that field. It is possible that 90% of human labour could be replaced. Our Group’s primary business is game art outsourcing, particularly in producing a vast number of 3D model assets. As mentioned earlier, for an AI to swiftly generate such assets, the foremost requirement is a substantial amount of training data. For instance, we would need billions of diverse 3D models covering various styles. This would enable the AI to learn comprehensively and produce a variety of 3D model assets to meet the diverse needs of virtual gaming worlds.

However, the internet predominantly provides an abundance of “pre-calculated or pre-rendered” fixed perspective assets like text, images, and videos. Consequently, AI can only learn to produce such assets. The availability of downloadable 3D model assets for training is scarce on the internet, and their quality varies greatly. While we may find 10-20 million of free 3D models, they constitute only a fraction of the total training data required. This limitation slows down the development of AI capable of generating complete 3D model assets.

Nevertheless, while AI may not produce complete 3D model assets, it can assist us in completing them faster. For example, if a specific stage of production involves applying static textures to 3D model assets, we can develop new AI technologies to expedite the process. What previously took 100 days of work might now only require 70 days. Both our clients and us will benefit from such technologies: we improve operational efficiency, and clients can allocate the savings for us to construct more realistic virtual gaming worlds, generating more valuable experiences.

We believe that no leading enterprise will reduce game development budgets due to the development of AI technologies in the future, especially for their renowned IP product series leading the competition. Leveraging the thriving AI technologies, these clients will create greater gaming content for their famous IP product series to maintain their competitive edge. It is difficult to imagine that top-tier IP works would easily lower development costs and budgets using AI technology, thus providing opportunities for competitors to catch up. Instead, top-tier IP works will likely utilise AI technologies to develop more content to maintain their leading positions. We believe we will benefit from the advent of AI technologies.

Winking Studios is a large studio with over 20 years of experience, having contributed to the development of thousands of games. With such extensive experience, we understand the crucial aspect of providing feedback to AI during its training process. It is akin to being seasoned players who know best how to train and educate our young talents to inherit our expertise and become more capable players in the future. Therefore, our Group is actively developing AI technologies that enhance productivity. Leveraging our expertise, we aim to develop useful tools for our clients, resulting in a win-win situation for everyone involved.

What is the Group’s biggest risk or challenge in the next 1-3 years that shareholders should be most concerned about? And how is the Group preparing itself for it?

I have been in the gaming industry for 26 years, and while it has continuously grown, there’s been a noticeable trend of companies, including large ones, downsizing recently. I believe this is due to the increasing concentration of profits in the industry among top-tier companies or specific well-known IPs. This might not be a healthy trend, as we always hope for a more diversified range of products to be retained, thus making the ecosystem more complete.

Our Group has been collaborating with top-tier companies and well-known IPs for many years, with some IPs being in partnership with us for over a decade, consistently generating revenue and profit for us. Additionally, we maintain a strategy of diversifying our client base. We don’t overly rely on specific clients or well-known IPs; rather, our revenue and profit come from dozens of different clients and IP products. We will continue with this strategy but will strengthen our collaboration with top-tier companies and well-known IPs.

To maintain our competitiveness, we have rooted ourselves in the region with the lower global inflation rates, particularly in Southeast Asia. This is why we are listed in Singapore, the first gaming company listed in the region, establishing studios in Southeast Asia that offer significant cost advantages. This ensures that we provide excellent value and returns for our global clients.

What is Winking Studios’ value proposition to its shareholders and potential investors? What do you think investors have overlooked?

The global game art outsourcing industry is fragmented with most market players being small independent studios. As one of the leading game art outsourcing companies in the world, our strong track record and capabilities to provide a comprehensive suite of art outsourcing services to clients set us apart from our peers and give our clients in Asia, Europe and North America the confidence in our ability meet their vigorous demands.

Despite macroeconomic headwinds seen in 2023, Winking Studios managed to achieve growth in FY2023 largely due to our prudent and conservative operating strategy, which effectively balanced challenges and opportunities. As many companies reduced budgets and cut projects, they often outsource more projects as a cost-saving measure, which led to increased opportunities for external development partners like us.

Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 19 March 2024 and have been republished with permission. You can read more on Winking Studios (SGX:WKS) on the SGX website.

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