During the CEDEC Premium conference at the Tokyo Game Show, Epic Games' Jay Wilbur announced a new "Epic China Outsourcing Division" that will handle offshore content creation for Epic and other companies.
During his speech, Wilbur claimed that while most companies run 60 to 80 man teams to create games for the PS3 and Xbox 360, Epic's upcoming Gears of War has a core team of only 30 developers. This is thanks in part to outsourcing low-end content to cheaper development houses in China. According to Gamasutra, "Wilbur explained that the cost per man month (including overhead) to produce games in North America is around $9,000, and in Europe and Japan, it's $8,500 per man month. But costs per man month in China are less than $4,000 - hence Epic's choice to keep its core team at Epic's NC offices, but outsource significant amounts of art creation for its games."
According to the report, Epic will be offering the outsourced service to other companies, although they did not specify if it would be restricted to Unreal Engine 3 games. The new Shanghai-based Epic branch contains key members from the teams who made content for a number of high-profile Ubisoft games.