‘State Of Decay 3’ studio faces mismanagement and misogyny claims

"The culture the studio had up until recently was not the most hospitable for anyone that was not a white cishet man"

According to a new report, Microsoft-owned studio Undead Labs is facing serious burnout, mismanagement, and a troubled development process as it works on State Of Decay 3.

This comes from a new Kotaku report, where 12 anonymous developers at Undead Labs came forward to talk about the current situation at the studio. Microsoft acquired Undead Labs in 2018, and the studio announcing its upcoming game State Of Decay 3 in 2020.

Some of the staff interviewed have raised concerns that Microsoft’s “hands-off” approach since the acquisition have caused major issues, with one staff member saying “we were afraid they would come in and change our culture but our collapse came from within, and we could have used [Microsoft’s] help.”

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“The culture the studio had up until recently was not the most hospitable for anyone that was not a white cishet man. It’s improved in the last six months or so. But the studio hired a lot of diverse talent that it did not adequately support [in the past],” said another developer.

Kotaku managed to get a response on behalf of Xbox Game Studios head Matt Booty, who said Undead Labs has seen “a number of positive changes”. A Microsoft spokesperson added that hires in 2021 were 42 per cent female or non-binary and 29 per cent were from racial or ethnic minority groups.

State of Decay 2
State Of Decay 2. Credit: Undead Labs / Microsoft

The report also suggests that Undead Labs founder Jeff Strain – who left the developer in 2021 and founded studio Possibility Space – sold Undead Labs after multiple employees recall him saying the developer would remain independent.

Strain responded to Kotaku’s questions in a Medium post, saying he had “a short time to respond to them” after the outlet requested an interview.

“There were several strong acquisition offers during my ten-year tenure at Undead Labs and we had visitors in the studio doing due diligence at various points. I never hid those meetings and actively involved studio leads as part of those discussions,” said Strain in response to the claim that he told staff Undead Labs would remain independent.

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“When you own an independent studio you are personally responsible for it—if you fail a milestone and don’t get paid, you have to cover the payroll personally—and SoD3 was going to be way beyond anything we could personally back financially. We needed to protect the jobs, benefits, and work culture we’d built up over the past eight years, and so we were receptive to acquisition discussions with Microsoft,” Strain added.

State of Decay 3
State Of Decay 3. Credit: Undead Labs

As outlined in the report, staff at Undead Labs also highlight how the studio was home to discrimination against female, non-binary and other marginalised groups employed there.

“When I interviewed at the Lab, I was sold [the idea of] a studio in transition that was making [diversity, equity, and inclusion] a top priority. What it was in actuality was studio leadership painting a DEI face for Microsoft, while women were consistently ignored, dismissed, interrupted, talked over, and blamed,” said a former developer.

Another former developer said that men would ask them to take notes during meetings, ignore their knowledge and make sexist comments. One male employee apparently said “You don’t look as pretty as normal today,” and “I’m surprised a girl like you has this job.”

There’s also mention of former head of people and culture Anne Schlosser, who staff said would sometimes ignore concerns and complaints and even side with “bad actors” at the studio.

State Of Decay 2. Credit: Undead Labs / Microsoft

“It got to the point where nearly every week, someone would sob on a video call with me, because I was the only one who would listen to them,” said one current developer.

According to three employees, an August 2021 meeting revealed to multiple staff members at Undead Labs they all felt the same way about the current cultural state of the studio.

The report added that while what happened next wasn’t entirely clear, Microsoft’s own human resources got involved, and Schlosser quietly left at the end of one work week.

Schlosser then denied this in a phone call with Kotaku, saying her departure was instead part of some studio reorganisation.

State Of Decay 2. Credit: Undead Labs / Microsoft

Other parts of the report talk about State Of Decay 3’s E3 2020 reveal, claiming that Microsoft requested a trailer to show at the event. This trailer featured a zombie deer, which came as a surprise to some staff as they didn’t even know if zombie fauna was to be a feature.

Microsoft later told Kotaku that participation in the E3 showcase was in fact optional.

Of the staff Kotaku talked to, some have stuck around at Undead Labs, with one saying “[State Of Decay 3] could be such a cool game and we’ve got a lot of great people working on it, and I just hope we don’t repeat the terrible habits of the last few years.”

In other news, a report suggests that Sony has cut almost 90 jobs from its North American branch of PlayStation.

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