A racing game built in a galaxy far, far away is turning into an unlikely case study for how AAA development gets done. Star Wars: Galactic Racer, developed by UK studio Fuse Games and published by Secret Mode in partnership with Lucasfilm Games, shipped with a core team of just 75 people. According to CEO Matt Webster, that small headcount was never an accident. It was the point. Fuse built the game using a three-tier structure that blends traditional outsourcing, self-contained external development, and a closer arrangement the studio calls co-development, where outside developers sit inside Fuse’s Slack channels, stand-ups, and code base as if they were full-time staff. Outlets including GamingBolt, GamesIndustry.biz, and The Game Business have now detailed the model, and the framing landing on October 20, 2026 is blunt: this could be a template for how mid-size studios compete with publishers that can field ten times the staff.
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What Happened: Fuse Games Details Its Co-Development Model
The story broke through a round of interviews Webster gave around the launch of Star Wars: Galactic Racer, an arcade combat-racing title set in the Star Wars universe. Rather than talk up the game’s Outer Rim tracks or weapon systems, Webster used the press cycle to explain how a studio of its size pulled off a licensed AAA project at all. He described a deliberate choice to keep the permanent Fuse Games roster small, then scale up and down using outside partners depending on what a given system or feature needed. That is a notable departure from the standard AAA playbook, where headcount tends to balloon during production and then gets cut hard once a game ships, a cycle that has produced repeated rounds of layoffs across the industry over the past three years.
Webster framed the approach as something other developers could study, describing it as built around a small permanent core working alongside trusted outside partners rather than a single giant internal team. He did not claim the model was unique to Fuse Games, and reporting on the story has been careful to note that the specific external studios Fuse used, their individual headcounts, and how long each partner worked on Star Wars: Galactic Racer were not disclosed in the available coverage. What is confirmed is the structure itself: three distinct tiers of outside help, each with a different level of integration into Fuse’s day-to-day workflow.
Who Is Fuse Games, and What Is Star Wars: Galactic Racer
Fuse Games is the studio behind Star Wars: Galactic Racer, working under publisher Secret Mode and in collaboration with Lucasfilm Games. The studio’s core team numbered 75 people during development, a figure confirmed in reporting from Aftermath. That is a modest headcount for a licensed Star Wars project, especially set against the scale of internal teams at the biggest publishers, where a single AAA release can carry a credits list running into the thousands once contractors and co-development partners are counted.
The game itself leans into high-speed, high-impact racing built on Unreal Engine, which gave Fuse a technical reason its distributed model could work in the first place. Unreal’s modularity let the studio hand off self-contained chunks of the game, such as the photo mode, to an outside studio without that studio needing deep access to every other system. That single example, the photo mode build-out, has become the clearest public illustration of how Fuse drew the line between a feature it could outsource cleanly and systems that needed tighter, ongoing collaboration.
Breaking Down the Three Development Tiers
Webster described the structure in terms of three tiers, moving from the least integrated form of outside help to the most. Each tier trades off control, speed, and relationship depth differently, and Fuse appears to have picked the tier per task rather than applying one model across the whole project.
Traditional Outsourcing Still Has a Place
The first tier is the one most studios already recognize: traditional outsourcing, where a vendor is handed a spec and delivers an asset or a system back with minimal ongoing coordination. This remains useful for well-defined, lower-risk work where the brief is tight and the integration surface with the rest of the game is small.
External Development: Self-Contained Briefs
The second tier, external development, is where the photo mode example sits. Fuse handed a cross-discipline brief, covering production, art, UI, and code, to an outside studio that built the feature largely on its own and then slotted the finished piece back into the main build. Because the feature was self-contained thanks to Unreal Engine’s architecture, the outside team did not need constant day-to-day contact with Fuse’s core staff to get it right.
Co-development, the third and closest tier, is where Fuse’s approach diverges most from how outsourcing usually works, and it is covered in its own section below.
| Tier | Integration Level | Example Use on Galactic Racer | Working Relationship |
|---|---|---|---|
| Traditional outsourcing | Low | Well-defined assets and systems with a fixed spec | Brief handed off, deliverable returned |
| External development | Medium | Photo mode, built as a self-contained feature | Cross-discipline brief, independent build, later integrated |
| Co-development | High | Core systems requiring ongoing alignment | Embedded in Fuse’s stand-ups, Slack channels, and code base |
Co-Development Explained: An Extension of the Team
Co-development is the tier getting the most attention, because it describes something closer to a merger of workflows than a vendor relationship. Under this model, external developers join Fuse’s daily stand-ups, sit in the same Slack channels as internal staff, and work directly inside the shared code base rather than handing off isolated chunks of work. Webster put it plainly when describing these partners: “They are, to all intents and purposes, an extension of our team. They just happen to work for another company,” he told GamingBolt.
That framing has also surfaced in a separate GamesIndustry.biz interview with Webster, where he laid out his broader case for why niche concepts like a Star Wars racing game can find an audience when a studio controls its costs carefully. That distinction matters because it reframes what outsourcing is supposed to accomplish. Webster has also pushed back on treating these arrangements as purely transactional exchanges of briefs and deliverables. “You give a brief, you get an output back, and you integrate it in. Which sounds transactional, but you shouldn’t treat it as transactional. It’s very important that you build relationships with those folks; you get a better result when you do so,” he said, according to the same GamingBolt interview. On the external development tier specifically, he explained why Unreal Engine made the middle option viable: “It’s clear to brief, clear to point to a set of features, and you need a cross-discipline team to bring it together, so you need production, art, UI, and code to create that thing. But because we’re in Unreal, it can be self-contained. So, someone can go off and build that, and we can slot it in.”
The practical upside of co-development is that it narrows the gap between in-house and outsourced work without the overhead of hiring permanent staff. The practical cost is that it requires more trust, more process discipline, and more time spent on relationship management than a studio would spend simply issuing contracts. Fuse appears to have judged that trade worth making for the systems that most needed consistency with its core design vision, while reserving the lighter tiers for work that could tolerate more distance.
Why Lucasfilm Games Bet on a 75-Person Studio
Handing a Star Wars license to a studio the size of Fuse Games is itself notable. Lucasfilm Games has historically worked with larger, better-resourced partners on flagship titles, and licensing decisions for the franchise typically draw scrutiny over whether a smaller studio can deliver at the polish level the brand demands. The co-development model is effectively Fuse’s answer to that scrutiny: a way to argue that a compact core team backed by well-integrated partners can hit AAA bars without AAA headcount.
This also lines up with a broader shift already visible elsewhere in the Star Wars games pipeline. Lucasfilm Games has been loosening its own rules about which publishers can work on Star Wars titles, moving away from a strict preference for only the largest publishers. Galactic Racer and its development model fit that pattern: a willingness to work with smaller, more specialized partners rather than defaulting to the handful of biggest studios in the industry.
Douglas Reilly, identified as vice president and general manager of Lucasfilm Games, pointed to Fuse’s racing-game credentials as the deciding factor, saying the pairing was “a true no brainer decision” once Fuse proposed a new take on racing set in the Star Wars universe. Craig Derrick, an executive producer at Lucasfilm Games, described the creative brief behind the project as less about nostalgia for its own sake and more about building something that felt new while still calling back to familiar Star Wars touchstones for players.
The AAA Cost Problem This Model Is Meant to Solve
The timing of this story is not incidental. AAA development budgets have climbed for years, and so has the size of the teams needed to hit modern production values across art, engineering, QA, and live-service support. That growth has come with a brutal downside: when a title underperforms, or when a publisher restructures, the first casualties are often the large internal teams built up during peak production. Thousands of developers across the industry have been laid off in waves since 2023, and much of that churn traces back to studios scaling headcount up for a single project and then having no next project ready to absorb the staff.
Fuse Games’ structure sidesteps a chunk of that risk by design. A 75-person core team is small enough to keep employed between projects without carrying the cost of hundreds of staff hired specifically for one release cycle. The co-development and external development tiers let that core team flex capacity up during crunch periods of production without permanently growing payroll. If the model holds up as a repeatable strategy rather than a one-off that worked for this particular game, it offers publishers a way to commission AAA-caliber licensed titles while pushing less of the financial risk onto a studio’s permanent staff.
That risk calculus is especially relevant given how the wider games market has been performing. Industry tracker Circana has reported falling US game spending in recent months, a backdrop that makes publishers more cautious about committing to the kind of large, permanent internal teams that made past AAA projects so expensive to staff and so painful to unwind.
| Model | Core Team Size | Flexibility to Scale | Layoff Exposure After Shipping | Coordination Overhead |
|---|---|---|---|---|
| Fully in-house AAA team | Large, often 300+ | Low once hired | High | Low (single org) |
| Traditional outsourcing only | Small | High per-task | Low | Low, but limited visibility into vendor work |
| Fuse-style co-development mix | Small (75 on Galactic Racer) | High, tiered by task | Lower for core staff | Medium, requires active relationship management |
Historical Context: From Megateams to Distributed Development
Outsourcing itself is not new to games. Art, animation, and localization work has been contracted out to external studios for decades, and co-development arrangements of varying closeness have existed quietly across the industry for years, often uncredited or underreported. What is different about how Fuse Games is talking about its process is the explicitness. Webster is naming the tiers, describing the integration level of each, and presenting the structure as a deliberate strategic choice rather than a cost-cutting measure forced by circumstance.
That framing arrives at a moment when the industry is already reassessing how games get made. Debates over the role of automation and AI tools in production have intensified, with figures across the industry weighing in on how much of the development process can or should change. Konami’s president, for instance, argued publicly that AI tools will not fundamentally reshape the game industry, a notably different emphasis from Fuse’s argument that the organizational structure around development, not just the tools used, is where real efficiency gains are available. An Xbox manager separately made headlines after building a playable game in three hours using AI assistance, illustrating how varied the industry’s current experiments with faster production methods have become, even if those experiments sit in a different category from Fuse’s people-and-process approach.
Competitive Comparison: How Other Studios Handle External Teams
Most AAA publishers already use some form of external support, but the depth of integration varies widely across the industry. Larger publishers with dozens of internal studios often rotate staff between projects internally rather than reaching outside the company at all, which keeps institutional knowledge concentrated but requires maintaining expensive bench capacity between releases. Studios building on Unreal Engine or Unity, where modular architecture makes it easier to isolate features for outside teams, tend to lean more heavily on the external-development tier that Fuse used for its photo mode. Engine choice is not incidental here. The 2026 landscape around Unity, Unreal, and Godot licensing and royalty terms has itself become a factor in how affordable this kind of distributed development is for smaller studios, since engine costs and revenue-share terms directly affect how much budget is left over for coordinating outside partners.
Other competitive franchises illustrate the opposite end of the spectrum. Big annual shooter franchises, where publishers field multiple full-size internal studios working in parallel on a single release, represent the high-headcount model Fuse’s approach is implicitly positioned against. Those franchises can absorb enormous teams because their release cadence and live-service revenue justify permanent staffing at scale. A licensed, non-annual title like Galactic Racer does not have that same guaranteed pipeline of future work to justify building out a large permanent studio, which is precisely the gap co-development is designed to fill.
Market Impact: What This Means for Publishers and Studios
If Fuse’s model gets picked up more broadly, the clearest effect would land on mid-size and independent studios competing for licensed IP deals. A proven playbook for delivering AAA-adjacent quality without AAA headcount lowers the bar for which studios publishers consider credible candidates for big licenses. That could open more opportunities for smaller teams to pitch on major franchises, provided they can demonstrate the process discipline Webster describes, treating external partners as genuine extensions of the team rather than arm’s-length vendors.
It would also shift pressure onto the outside studios providing co-development and external-development services. Demand for teams capable of working inside another studio’s Slack channels and code base, essentially functioning as embedded contractors, could grow if more publishers start asking licensees to prove they have a scalable staffing plan before greenlighting a project. That creates a market opportunity for specialist co-development shops, while adding pressure on traditional outsourcing vendors whose business model depends on arm’s-length, brief-and-deliver relationships rather than deep integration.
For publishers, the model offers a hedge against the market conditions already squeezing the industry, since smaller permanent teams reduce the downside if a title underperforms. Secret Mode’s willingness to publish a racing game from a 75-person studio under the Star Wars banner may itself be read as a signal that publishers are increasingly comfortable backing leaner teams when the staffing model behind them is well-documented and credible.
Risks and Open Questions About the Co-Development Model
Several details that would clarify how repeatable this model actually is remain unconfirmed in current reporting. The identities of Fuse’s specific co-development and external-development partners have not been disclosed, nor has the duration each partner spent on the project or the size of their individual teams. Without that information, it is difficult to know exactly how much of Galactic Racer’s total development effort came from outside Fuse’s 75-person core versus how much sat inside it.
What Reporters Haven’t Nailed Down Yet
It is also an open question whether co-development scales cleanly to larger, more complex games. Galactic Racer is an arcade racer, a genre with a relatively contained set of systems compared to an open-world RPG or a live-service shooter with years of planned content updates. Webster’s framing of the model as a potential template for AAA development broadly is, at this stage, a claim from the studio’s own CEO rather than something independently validated across a different, larger project. The business analysis site The Game Business has also raised the underlying question of how a studio the size of Fuse secured a Star Wars license in the first place, a detail that touches on business relationships and licensing terms not fully covered in current reporting.
Predictions: Where Co-Development Goes From Here
- Expect more studio leaders to publicly describe their own tiered outsourcing structures in interviews over the next year, following Webster’s lead in naming and explaining the practice rather than treating it as a hidden cost-control measure.
- Mid-size studios pitching for licensed IP are likely to start presenting staffing and partner plans explicitly as part of their pitch, using Galactic Racer’s reception as a reference point for publishers weighing smaller teams.
- Demand for specialist co-development studios, firms built specifically to embed inside another studio’s workflow rather than deliver isolated assets, could grow as more publishers look for ways to avoid overstaffing single projects.
- Engine choice will likely keep mattering to this conversation, since the modularity that let Fuse hand off a self-contained photo mode build depends heavily on how cleanly a given engine separates features from core systems.
- Whether this model holds up will probably depend on Fuse Games’ next project. A second title built the same way, especially one more complex than an arcade racer, would do more to validate the approach than anything said during the Galactic Racer press cycle.
FAQ
What is Star Wars: Galactic Racer?
It is a racing game set in the Star Wars universe, developed by Fuse Games and published by Secret Mode in collaboration with Lucasfilm Games.
How big was the development team behind Galactic Racer?
Fuse Games’ core team numbered 75 people, a figure confirmed in reporting from Aftermath, supplemented by external partners across the studio’s co-development and external-development tiers.
What is co-development, according to Fuse Games CEO Matt Webster?
Webster describes co-development as a close working relationship where external developers participate in Fuse’s stand-ups, Slack channels, and shared code base, functioning as an extension of the internal team rather than an outside vendor.
How is co-development different from traditional outsourcing?
Traditional outsourcing typically involves handing a vendor a fixed brief and receiving a finished deliverable back with limited ongoing contact. Co-development involves continuous, day-to-day collaboration inside the same tools and workflows the core team uses.
What engine was Star Wars: Galactic Racer built on?
The game was built on Unreal Engine, which Webster credited with making self-contained features like the photo mode easier to hand off to an external studio.
Could other studios adopt this three-tier development model?
Webster has suggested the structure could serve as a model for AAA development more broadly, though this remains his own characterization rather than an independently confirmed industry trend, and key details about Fuse’s specific partners remain undisclosed.
Who published Star Wars: Galactic Racer?
Secret Mode published the game, working in partnership with Lucasfilm Games on the Star Wars license.
Why does this development model matter for the games industry right now?
It arrives during a period of repeated layoffs tied to AAA studios overstaffing for single projects, offering a staffing approach that could reduce that cycle by keeping permanent teams smaller and scaling with outside partners instead.
