Games industry investors are “sitting on the sidelines waiting for obvious slam dunks”, says Undead Labs boss, with labour costs a key worry
State of Decay developer Undead Labs has completed its buyout of independence from Microsoft following an acquisition by unnamed investors. The studio’s workforce established a new holding company, Full Measure, to facilitate the transaction, with layoffs occurring during the transition.
Studio head Philip Holt provided insight into both the studio’s ownership change and the current investment landscape in gaming. He emphasized that Undead Labs will not compete on labor costs alone, stating “I’m never going to win in the race to the bottom on the economics of labor.” Holt characterized investor sentiment as risk-averse, with major capital holders “sitting on the sidelines waiting for obvious slam dunks”—seeking guaranteed returns rather than supporting experimental or mid-tier ventures.
Holt’s observations underscore growing industry concerns about labor costs and capital scarcity. Although investment funding exists, investors are increasingly selective, channeling resources toward established franchises and proven concepts over diverse projects. This cautious investment posture creates challenges for independent studios and mid-market developers seeking external funding, favoring institutional knowledge and proven commercial track records over innovation or creative risk.