The rapid increase in the number of approved therapeutic proteins, including recombinant antibodies, for diseases necessitating chronic treatments raises the question of the overall costs imposed on healthcare systems. It is therefore important to investigate alternative methods for recombinant protein administration. The implantation of genetically engineered cells is an attractive strategy for the chronic long-term delivery of recombinant proteins. Here, we have developed a high-capacity cell encapsulation system for the implantation of allogeneic myoblasts, which survive at high density for at least one year. This flat sheet device is based on permeable polypropylene membranes sealed to a mechanically resistant frame which confine cells seeded in a tailored biomimetic poly(ethylene glycol) (PEG)-based hydrogel matrix. In order to quantitate the number of cells surviving in the device and optimize initial conditions leading to high-density survival, we implant devices containing C2C12 mouse myoblasts expressing a luciferase reporter in the mouse subcutaneous tissue. We show that initial cell load, hydrogel stiffness and permeable membrane porosity are critical parameters to achieve long-term implant survival and efficacy. Optimization of these parameters leads to the survival of encapsulated myogenic cells at high density for several months, with minimal inflammatory response and dense neovascularization in the adjacent host tissue. Therefore, this encapsulation system is an effective platform for the implantation of genetically engineered cells in allogeneic conditions, which could be adapted to the chronic administration of recombinant proteins.