State of Decay 3 stalled as studio battles discrimination claims

State of Decay 3 has lingered in pre-production for the past two years, reports Kotaku, while Undead Labs has mutated from a lean and ambitious independent studio into a first-party Xbox developer battling big-time industry problems, such as a toxic workplace, discrimination, and burnout.

In fact, reports Kotaku, Undead Labs was pressured into announcing State of Decay 3 at the Xbox Games Showcase in July 2020 well before developers felt the game was ready for it. That, said Undead Labs veterans, was followed by a rushed internal demo for Microsoft leadership, that accelerated their feeling of disarray.

State of Decay 3, according to unnamed sources cited by Kotaku, was supposed to have two more internal demonstrations in the fall of 2021, and Philip Holt, the studio executive brought in as Undead Labs’ chief of staff after Microsoft acquired the studio in 2018, wanted both to include actual gameplay. Developers “revolted,” according to the report, considering the work and crunch that would be necessary to get the project o such a state. While Holt relented, the disruption still pushed a lot of Undead Labs veterans out the door, developers said.

“If this was what pre-production was like there was no way I was sticking around for full production,” an unidentified developer told Kotaku.

State of Decay 3 still has no official launch date or window. Its 2020 Xbox Games Showcase announcement was notorious for a pre-render trailer that dwelled on a zombie deer, seen through a crossbow’s scope.

“They’re still at square one with a lot of stuff,” another developer said. Meanwhile, Kotaku’s extensive report depicts Undead Labs as roiled by internal dissent and mistrust over matters of discrimination and misconduct, which many workers felt were neglected by new boss Microsoft.