I agree, the article reads like they had an idea for a story and tried to fit the facts around it. The heaviest use of contractors in the games industry is, as

I agree, the article reads like they had an idea for a story and tried to fit the facts around it. The heaviest use of contractors in the games industry is, as they imply in the article, in test. Typically you'll have a small core test group in-house to handle test during development and then a much bigger outsourced group you'll ramp up prior to release. In a large multiplayer game you may want 100s of testers on hand at any one time, but only for a few days at a time. Outsourcing gives you that. Depending on the game you may be content heavy in which case may use outside contractors (or outside studios) to help with the mass of work but that seems to have dropped off as a practice in recent years. Using Chinese and Indian art outsourcing studios was big 10 years ago. More recently the big players have moved to a model where each of their development studios has a game (or two) in development with a core team working only on that game and a content team who will work on whichever studio needs their help (typically the next game for release). If you are not 'outsourcing' the entire game development you'll typically want most of the core staff in the same location and full-time. Design, code, technical art and art direction all have to work very closely together. Not something you can easily split around the world or assign to short-term contractors. Psyonix did outsource their console versions to another studio (likely comprised of full-time employees), which is common with smaller companies who would rather not have to ramp-up their engineering staff for console support. It also saves Psyonix the large capital expense of purchasing development kits.