State of Decay studio Undead Labs goes independent after Xbox restructuring, but lays off “a significant number” of the team in doing so

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State of Decay studio Undead Labs goes independent after Xbox restructuring, but lays off “a significant number” of the team in doing so

Eurogamer · 2 hours ago

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.

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