MANILA, Philippines--Small game development studios in the Philippines are eyeing a bigger slice of the outsourcing pie.

During a forum on trends in the video game industry, several Filipino and foreign-owned game studios acknowledged that the local game development industry has only earned $3 million in 2008. This means that there is more room for growth.

Cesar Tolentino, research consultant for the Game Development Association of the Philippines (GDAP), pointed out that only about 500 people were hired by nine companies in the country last year. However, several of these game studios have been doing outsourcing services for foreign studios for the last two years, he added.

About 80 percent of game development revenues last year came from foreign projects, Tolentino said.

?[The local] industry is still small but the annual growth rate since 2005 is an average of 100 percent. We expect that by the end of 2009 the industry will earn about $7 millions," Tolentino added.

Foreign game studios like Collission Studios are now working with local developers. This company is based in the US but has a production facility in the Philippines.

During the forum, Philippe Erwin, Collision Studios chief executive officer, acknowledged that the visual arts skills of Filipinos.

Erwin said the Filipino's English fluency is a major leverage to get projects abroad. "It's easier to deal with someone who can also speak the language," the executive said.

The executive said video games are becoming more complex to build especially with the current generation of video game equipment, such as the Sony PlayStation 3, Microsoft Xbox 360 and Nintendo Wii.

He said local game developers could focus on providing specific outsourcing services, such as concept art, texture, motion capture, character modeling, among others.

Erwin said that Collision Studios is looking at setting up a testing lab in the Philippines for games that are being developed.

Meanwhile, Darrell Benvenuto, president of game development services provider Digital Octane Inc., said game development outsourcing projects are being done in India, China, Russia, Korea, UK and some Eastern European countries.

Benvenuto said the increasing demand for outsourced work in the gaming industry can still spill over to the Philippines.

Benvenuto said global video game outsourcing could is expected to hi $1.1 billion this year and $2.5 billion by 2010.

"Outsourcing will by then represent over 40 percent of the total budget of creating a video game," the executive said.

In an interview, GDAP President Gabby Dizon said the local organization is now establishing a network of partner developers and clients here and abroad.

Considering the demand for specific video game development services, Dizon said they are still in need of specific talents that can provide what is needed by foreign studios.

"We've been working with colleges and universities to help them build curriculum on game development so that we can produce talent to accommodate these demands," he said.