Following Xbox’s recent “reset” that involved layoffs affecting almost 2,000 jobs, State of Decay developer Undead Labs’ studio head, Philip Holt, has revealed details about the process of becoming independent from Xbox, which even resulted in “a significant number of people leaving the company”. In an interview with The Game Business, Holt spoke about his transparent approach with the studio’s employees during Xbox CEO Asha Sharma’s planned reset.
Holt refers to it as being “irresponsibly transparent”, which likely helped with the fact that the studio didn’t necessarily see him as the villain when the layoffs hit and Sharma announced plans to divest Xbox off four studios, one of which was Undead Labs.
“Rather than keeping them in the dark and manufacture some alternate reality, I just brought them along. That probably reduced some anxiety. I tried to put myself in their shoes. You’re not in control, you don’t really know what’s happening, you know your job might be at risk, and you’re wondering if this game is actually going to finish. So, I tried to share as much as I could. We had pretty direct conversations. We talked early on that under probably any scenario, there’d be job losses. On the day of the layoff, people were prepared. That ended up being a real courtesy, as painful as it was. Nobody wants to lose a job, but I think people understood the reason.
“As a result, the surviving team doesn’t look at the company, or at me, as someone who’s done great damage to the people they love. They saw it as a necessary consequence of the reality that we’re in.”
Now that Undead Labs is independent, Holt spoke about how the studio ended up being owned by the remaining employees still working there. To do this, he created a company called Full Measure to acquire Undead Labs, shareholders of which would be the studio’s employees, giving them ownership of the studio in the process.
“This is not a typical founding of a company. I wasn’t employee one. I didn’t raise the startup capital, and I didn’t take on all the commercial risk. The value that’s present has been created by the team that’s here, and the team that just left. So, it was really important to me that everybody has a stake and an opportunity for upside participation, because so much of the company’s worth is the work that they have contributed to.”
This ownership of Undead Labs has also put quite a bit of pressure on the employees, since the studio can’t really afford to miss deadlines or delay State of Decay 3 now that it is completely independent. However, succeeding with the game’s eventual release would also end up benefiting just about everyone that is still working at Undead Labs.
Further in the interview, Holt also spoke about the reason State of Decay 3 has taken so long to develop. However, with production having properly picked up in 2022 or 2023, he acknowledged that there were fears of “getting swallowed up or divested before we had a chance to present to the world what we were working on.”
So, it was a bit of a marker on the table. I was saying, State of Decay 3, we’re announcing it, the audience knows it’s in development, and here’s a trailer to demonstrate our vision.”
State of Decay 3 is being developed for PC, PS5, and Xbox Series X/S. However, the title doesn’t yet have a release date. For more, check out the 72-minute gameplay showcase from back in June.
