State of Decay studio Undead Labs faces allegations of sexism and bullying

The open-world zombie survival game State of Decay 3 was announced in July 2020, yet according to a Kotaku report yesterday the game remains stuck in pre-production as the studio has struggled with mismanagement, burnout, and workplace toxicity following its 2018 acquisition by Microsoft.

Kotaku's story is based on 12 anonymous interviews with current and former employees, so it's important to note that this constellation of feedback, though upsetting, may not tell a complete picture of the studio's state or history.

Undead Labs has doubled in size since the Microsoft buyout, according to the report, but the departure of studio founder Jeff Strain, who left in 2019, left a real leadership void. While some employees initially worried that Microsoft would change the studio's internal culture, it actually took an extremely hands-off approach, ultimately to the detriment of the company, according to one former employee. "Our collapse came from within, and we could have used [Microsoft’s] help," they said.

The lack of clear direction during early pre-production on State of Decay 3 was exacerbated by problems at the studio. Developers split off into "strike teams" to prototype different new features, but there was little communication or oversight, and team members were routinely shuffled around, so there was no consistency in direction. One former employee said management would ignore QA concerns in favor of showing "artificial progress" on the game. 

"Milestones consisted of a pile of disjointed features that were less about making a fun video game and more about checking off a list,” a former developer told the site.

Worse, nine of the former employees interviewed for the report also complained about misogyny, bullying and discrimination at the studio.

"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," one said. "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."

Another said that women's opinions, even on basic matters, were often "outright rejected," and that "no one would listen to them, even women in director-level positions were outright ignored, talked over, and blamed for problems."

"We had to have meeting etiquette rolled out because men kept talking over women so badly in all the meetings and belittling them," another source said. "But the guidelines didn’t help."

Multiple employees interviewed for the report put the blame for the problems largely on Philip Holt, Strain's replacement as studio head. They accused him of fast-tracking friends from other studios to lead new Undead Labs offices in Florida and Illinois, and also claimed that he helped push out two women in high-level positions by failing to adequately support the and hiring men for higher-placed positions to absorb their roles. "It was really a pattern where women were uprooted and men were protected and helped," one current employee said.

Microsoft denied the allegations of nepotism, however, saying in a statement that "there is a rigorous and standardized hiring process in place at Undead Labs for all potential hires, with visibility and review from multiple studio members.”

It also noted that changes at Undead Labs in recent years included "an entirely new leadership team" and that 42% of new hires in 2021 were female or non-binary, and 29% were from a visible minority group. The studio has also launched new training for managers, including a sexual harassment workshop. Some employees see the changes as movement in the right direction, while others say Holt's continued presence is a roadblock. 

Despite these issues, many of the current and former employees interviewed for the report said they felt very positive about some aspects of the studio; some said that while there's room for improvement, it's a very good place to work overall. The Microsoft acquisition caused upheaval, but it sounds like there's hope for a turnaround: One current developer said that changes at the studio could also mean that State of Decay 3 could finally start making real progress forward. "It 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," they said.

Interestingly, Strain, the founder of Undead Labs, has been vocal about the game industry's need to increase workplace safety and inclusion since his departure: In August 2021 he called for unionization across the industry, and in October he co-founded a new studio, Possibility Space, with a specific commitment to treating employees "fairly and equally."