State of Decay studio Undead Labs goes independent after Xbox restructuring, but lays off “a significant number” of the team in doing so
Undead Labs has left Microsoft-owned Xbox to become an independent, worker-owned studio following Xbox’s latest restructuring. The separation preserves the future of State of Decay 3, but also involves layoffs affecting a “significant number” of employees, ending a 15-year partnership with Xbox.
State of Decay 3 remains in development for Xbox, PC and PlayStation, with a closed beta still planned before the end of 2026 and a 2027 release target. The game will remain available through Game Pass and has a new, unnamed publisher; Microsoft had previously said it had found a buyer for Undead Labs without identifying them.
- Undead Labs becomes independent and worker-owned.
- Significant layoffs accompany the studio’s separation from Xbox.
- State of Decay 3 remains planned for 2027 and Game Pass.