Xbox studio ‘Undead Labs’ faces allegations of mismanagement

Xbox has faced plenty of criticism in the past for its heavy-handed approach to studio and project management, so when Xbox began acquiring and forming new studios in recent years, it chose to go with a more hands-off approach. Unfortunately, there are downsides that come with this, as we are seeing this week in a new report on Undead Labs and State of Decay 3.

Kotaku has published an in-depth report on Undead Labs this week, citing current and former employee sources. The report includes claims of mistreatment and mismanagement at Undead Labs. One source is quoted as 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.”

Microsoft acquired Undead Labs in 2018, alongside Playground Games and a few other studios. Rather than assigning new leadership, or enforcing changes, Microsoft has allowed these studios to retain their current operations and internal cultures. Microsoft hasn't even been enforcing development milestone deadlines, something confirmed by this report, as well as a previous report on The Initiative, in which one employee said they were surprised with how lenient Microsoft was being.

This level of autonomy is great if you have the right teams in place, and Microsoft's hands-off approach shows that it believes in the teams it has acquired. Unfortunately, it seems some at Undead Labs have run into issues with management. The report details a messy pre-production process for State of Decay 3, with teams being pushed to meet unrealistic deadlines by the company's current studio head, Philip Holt.

State of Decay 3 was announced in 2020 with a CGI trailer, while the game was still in pre-production and teams had yet to make decisions on certain features. It is alleged that Holt pushed for this trailer, even though Microsoft wasn't mandating that State of Decay 3 be shown during its 2020 showcase. There are also allegations of sexism, with some women at the company saying they weren't necessarily heard during meetings. The company's head of HR was reportedly unhelpful when people did file complaints.

There is no huge smoking gun here, so there aren't allegations of sexual harassment, and there are no major horror stories like the ones reported about Activision Blizzard last year. Still, it goes to show that Xbox still has room for improvement and perhaps Microsoft should take a more active role in the operations of some of its new studios.

Kotaku did reach out to Microsoft for comment on the matter. Xbox Game Studios head, Matt Booty, got back to them, saying: “Every studio at Xbox is given the resources and guidance they need to grow in both capability and culture. What that support looks like will vary by studio, but each has a direct connection with Microsoft HR resources outside of what they have on their team, and the ability to work with other studios and partner teams to leverage their expertise.”

Booty added that Undead Labs has “seen a number of positive changes” in the last few years and the company is “confident in the direction the team is taking State of Decay 3”.

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KitGuru Says: Undead Labs has room for improvement, as do many studios around the world. Hopefully Microsoft will pay attention to concerns like the ones cited here, and offer employees better channels to provide feedback and improve working conditions. 

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