Set within theoretical frameworks combining knowledge based capability approach and transaction cost theory of a firm's innovative outsourcing strategy, the present paper empirically analyzes game developer's out-sourcing factors. The factor analysis shows that knowledge transfer of high-tech technology is not easily accomplished. Efficient out-sourcing requires effective interaction capabilities between game engine supplier and game developer. For the effective game developer's out-sourcing, game developer's absorptive capability is needed to collaborate with game engine supplier's user-friendliness of game engine regime and supporting capability. The result also show that knowledge based factors and transaction cost factors are closely related each other. Knowledge based factors reduces transaction cost and vice versa.