Outsourcing studios are a convenient tool for scaling production, but some clients abuse this convenience and try to cut costs at the expense of external contractors. Coda has also encountered such situations — and in practice, it turned out that working with AAA studios can be just as risky as working with solo developers. One client might delay a six-figure payment for more than four months, while another might outright refuse to pay — claiming that the company’s CEO didn’t approve the results, even though the art team was happy with them.
These cases point to a systemic problem rooted in economic instability, a culture of exploitation, and weak regulation. In this article, we’ll break down how such scams happen, why they’ve become normalized, and how to protect yourself — drawing on real examples and our own experience.
Stories of Deception
There are countless cases, details, and circumstances in which freelancers and outsourcing studios are cheated, but all disputes generally fall into three categories.
Power imbalance from the start
This includes cases involving seemingly reputable and public companies that decide to save money at the expense of labor. Almost always, contractors are required to sign an NDA before beginning work — not only forbidding them to talk about the project, but even to mention the fact of collaboration itself. Breaking it can lead to heavy fines and lawsuits, often under the laws of the client’s country. That’s why most industry scandals only surface after the contract is over.
The next step is the contract — almost always written by the client and designed to protect their interests. It typically includes detailed penalties for missed deadlines, but rarely, if ever, addresses the client’s responsibility for late payments. Contractors may try to make edits, but big studios are rarely willing to spend time on negotiations. Their stance is usually: “If you don’t agree, we’ll find someone else.” The result: the contractor is placed in a deliberately weaker position.
No legal entity
Another case involves “clients” who never really intended to release a game, but simply wanted free work. Someone under the pseudonym Kova announced hiring for the projects Zeal and AetherBound: 20–60 hours a week, about $13/hour, with promised investments and “connections to Amazon Game Studios.” Later, it turned out the company wasn’t registered at all; after months of work, Kova vanished without paying anyone — and the truth only came out after victims shared screenshots of their chats.
In 2024, MBS Studios promised freelancers $10,000 a month for creating Unreal Engine tools and even asked for banking details for “payment.” But they disappeared without a contract. Later it became clear that MBS was using unpaid content, possibly for demos or fundraising.
Free freelance work
The largest share of scams target freelancers. On platforms like Fiverr and Upwork, artists often face disappearing clients after delivery or endless unpaid revisions. These stories are especially common among newcomers willing to take risks for experience and portfolio pieces.
For example, artist Greg Mirles worked from 2013 to 2016 on the Kickstarter project The Mandate by Matsuko. He created over 1,000 assets, turned down other lucrative offers, and worked almost nonstop. But in the end, he went unpaid for the last six months of work.
Another freelance artist from Germany worked remotely on a project for a Portuguese game studio. All payments went through — except the final one of €1,200. The client kept saying “the transfer is coming soon,” then blocked him on Discord and stopped replying to emails. Suing would have cost the freelancer far more than the €1,200 he lost — exactly what the client was counting on.
Yet another freelancer, working on an unnamed project for two weeks at an hourly rate, expected payment on the due date. Instead, the client simply declared the work “not up to their high standards” and refused to pay altogether.
Why It Happens
Problems with payments and scams in outsourcing don’t come from one or two bad clients. Since 2022, the industry has been under huge pressure: studios are closing, hundreds of thousands of developers have lost their jobs, and rising competition has driven rates to rock bottom. In such conditions, even an offer to “try it for free first” can sound tempting. Scammers and opportunistic companies take advantage of this by creating fake job postings, promising access to “big projects,” and walking away with free content.
Things get especially blurry when enthusiasm borders on exploitation. There are many stories of modders creating large-scale content for AAA games — but not always getting credited. On The Wayward Realms by OnceLost Games (led by developers of Morrowind), some of the content is still being produced by unpaid volunteers. The line between passion and exploitation has become dangerously thin.
The imbalance of power in the industry only makes things worse. Small studios and freelancers compete for a limited number of projects, rarely have leverage to dictate terms, and most “standard contracts” protect only the client: penalties for missed deadlines are there, but no liability for late payments. And if payment flows through intermediaries (agencies, partner studios), the contractor can simply get “lost” in the bureaucracy, without the resources to sue. International litigation often costs more than the contract itself.
This creates the foundation for a larger crisis. Game budgets keep rising: producing a AAA title now easily exceeds $200 million, while according to rumors, a game like Concord might have cost around $400 million. Yet the industry still prefers to bet on big names and marketing — investments that don’t always pay off. As Jason Schreier wrote in Press Reset and his Bloomberg investigations, studios often burn out their teams chasing hype, and when a game flops, the risk falls on developers and outsourcing partners. Sure, we got a great example with Keanu Reeves in Cyberpunk 2077 — but on the other hand, does anyone still remember Crime Boss: Rockay City starring Michael Madsen?
All this shows that delayed or refused payments aren’t accidents, but symptoms of the industry’s systemic model. It’s important to remember: crisis demands systemic solutions. Contracts, client verification, and collective pressure against bad practices aren’t overcautious — they’re necessary for survival.
How to Protect Yourself
1. Document everything
Before starting work, two documents are usually signed: an NDA (Non-Disclosure Agreement) and the main Contract. These are the key tools for describing the relationship and resolving potential disputes. A good practice is to consult a lawyer: they can help navigate complex wording and advise on where to add clauses you need.
NDA — carefully read the terms to avoid violations that could result in fines.
Payment terms — make sure the process is clearly defined. For example: once work is delivered and an invoice issued, the client must pay within 15 days. Also check which account the payment will come from and specify your own.
Revisions — set a fixed number of revisions, or at least agree on how changes will be handled and compensated. Make sure the client has properly defined their expectations upfront.
Conflict resolution and force majeure — the contract should define when and how cooperation can be ended, suspended, or extended.
2. Vet your clients
Before working with a new client, make sure they’re real and reliable:
Registration and legal status — check whether the company is officially registered. The contract should list its legal address and business ID. Even a quick search can reveal details about founders, staff size, and legitimacy.
Reviews and website — look for mentions on professional platforms, social media, or forums. Reddit or Discord can work too. Did the company attend GDC? Are employees members of professional associations? These details can expose red flags.
Recommendations— if possible, talk to contractors who’ve worked with them before and ask about their experience.
Start small — if you can, begin with a small task to test their honesty and communication without risking major resources.
Connections — networking often reveals insights about which studios to avoid. The industry is surprisingly small, and word-of-mouth can be faster than waiting for public info.
Many studios and artists come into gamedev out of love for games — for some it’s a childhood dream, for others a way to be closer to beloved worlds and communities. But it’s important to remember: no matter how inspiring the project, this is still business. Pragmatism and caution are essential.
Every deal should be backed by documents that protect both sides — not just the client. Contracts and formalities may seem boring, but they’re what turn a risky collaboration into a sustainable partnership. And the more carefully studios and freelancers approach these matters, the less room there will be for exploitation — and the healthier the whole industry will become.
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