Key information
State of Decay developer Undead Labs bought their independence from Microsoft after a deal with an unnamed potential buyer, identified by The Game Business as Tencent-owned Splash Damage, fell through. Studio head Philip Holt noted that staff created Full Measure as a holding company to facilitate the buyout, which was followed by layoffs.
Holt described the wider investment climate as challenging, stating that capital is available but nervous and waiting for obvious slam dunks. He explained that investors expressed concern regarding decision-making speeds and labor economics.
According to Holt, investors heavily scrutinized the studio's unit cost of labor because Seattle is one of the most expensive locations for game development. He pointed to a broader economic race to the bottom as lower-cost international studios gain prominence.
Despite structural changes and layoffs following the transition, Holt confirmed that Undead Labs still aims to release State of Decay 3 next year while scaling the business according to audience demand.
