State of Decay 3 Development Reportedly Hampered By Toxic Work Environment and Studio Mismanagement

It appears that State of Decay 3 is the subject of a troubled development at studio Undead Labs, with a report alleging that the latest entry in the series (following on from 2018's State of Decay 2) is apparently stalled, due to a toxic work environment and mismanagement from the higher-ups.

According to the report by Kotaku (via VideoGamer), no less than a dozen current and former employees spoke anonymously to the site, painting an unappealing picture of life at developer Undead Labs. Said employees state that the way in which the studio has been run has resulted in State of Decay 3 becoming stuck in pre-production, almost two years on since the game was first unveiled in July 2020.

While some aspects of life at the studio are apparently quite positive, Microsoft's decision to be hands-off (since acquiring Undead Labs in 2018) have reportedly had an adverse effect, but the deal proved necessary for work on State of Decay 3 to get the greenlight. “It was clear in 2018 that Undead Labs was going to focus on the State of Decay IP, and the expectations—and initial budget—for SoD3 were way higher than anything we’d done before,” ex-studio head Jeff Strain wrote on Medium.

Alleged “patterns of discrimination” against minority employees, according to nine of the twelve anonymous employees, as well as once source claiming that “women’s opinions would be outright rejected, even for extremely basic code or games knowledge,” are among the issues at Undead Labs. “No one would listen to them, even women in director-level positions were outright ignored, talked over, and blamed for problems.”

New studio head Phillip Holt has also been accused of nepotism and of fast-tracking hiring of friends to positions at the developer. “There is a rigorous and standardised hiring process in place at Undead Labs for all potential hires, with visibility and review from multiple studio members,” Microsoft said in response to these claims, while Holt himself issued his own statement to Kotaku.

“Since our acquisition by Microsoft in 2018, Undead Labs has been focused elevating the quality and ambition of State of Decay and increasing the diversity and inclusivity of our studio culture,” Holt's statement reads. “Building an inclusive and supporting environment is central to our vision of our culture, how we enable our teams to do their best work, and how we build the best games. I recognise that some of our employees, current and former, have shared that their experiences at the Lab weren’t always positive.”

His statement continues: “Our past culture does not exemplify who we are now, nor who we want to become. We have seen a lot of change in the last few years: we have an entirely new leadership team, including new HR Director and department in 2021; hired about 75 employees since the beginning of the pandemic; and have transformed the demographic make-up of our team. We’ve already seen that our ongoing cultural transformation is creating a better workplace for the team, which leads to better games for our community. I am proud of the work we have done, humbled by the task in front of us, positioned to learn from this experience, and committed to doing better every day.”

Where all of this alleged discord at Undead Labs leaves the fate of State of Decay 3 is currently unknown, but it doesn't sound particularly encouraging.