Undead Labs goes independent from Xbox, confirms layoffs and State of Decay 3 development
Undead Labs, the developer of the State of Decay series, has announced its separation from Xbox and is now an independent, employee-owned studio. The studio confirmed that State of Decay 3 remains in active development, targeting a 2027 release on PC, PlayStation 5, and Xbox Series X|S, and will be available on Xbox Game Pass. This transition, however, has resulted in significant layoffs, impacting a substantial number of employees.
IGN was the first to report the studio's independence and the continuation of State of Decay 3's development. The layoffs at Undead Labs follow a broader trend of restructuring within Microsoft's gaming division, which included 3,200 layoffs and the divestment of four studios earlier in 2026.
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Undead Labs confirms indie status, developer layoffs, and continued State of Decay 3 development
Undead Labs has officially separated from Microsoft and is now an independent, employee-owned studio. Development of State of Decay 3 continues, with the game slated for a 2027 release on Xbox, Game Pass, PlayStation 5, and PC. The transition to independence unfortunately involved an undisclosed number of layoffs.
Undead Labs makes 'significant' layoffs after splitting from Xbox
Undead Labs, the studio behind the State of Decay franchise, has become an independent, employee-owned company after divesting from Xbox. This separation has resulted in significant layoffs, impacting employees who worked on State of Decay 3. The studio plans to work with a new publisher for the game's release, which will still launch day one on Xbox Game Pass.
State of Decay 3 studio Undead Labs lay off "a significant number" of "exceptionally talented developers" after gaining independence from Xbox
Undead Labs, the studio behind State of Decay 3, has laid off a significant number of employees shortly after becoming independent from Xbox. This move follows a trend of layoffs across the industry and within Microsoft-owned studios, impacting other developers like Double Fine, Compulsion Games, Ninja Theory, and Arkane Studios.
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, the developer of the State of Decay series, has become an independent, worker-owned studio after being acquired by Microsoft in 2018. This transition comes with significant layoffs, with the studio stating "a significant number" of staff are departing. Despite the restructuring, development on State of Decay 3 continues for PC, PlayStation, and Xbox, with a closed beta planned before the end of the year and a 2027 release target.
Undead Labs confirms it is now an "employee-owned studio"
Undead Labs, the developer of State of Decay, has announced its separation from Xbox and is now operating as an employee-owned studio. Development on State of Decay 3 continues, with a planned release in 2027 for Xbox, Game Pass, PC, and PlayStation. This transition occurs amidst broader layoffs and restructuring within Microsoft's gaming division.
State of Decay 3 Remains in “Active Development” Despite “Significant” Layoffs at Undead Labs
Undead Labs, now independent from Xbox, has announced significant layoffs, raising concerns about State of Decay 3's development. Studio head Philip Holt confirmed the game remains in "active development" on schedule, utilizing Unreal Engine 5 and assistance from The Coalition. Despite past allegations of a toxic work environment and previous rumors of layoffs, the game is still targeting a 2027 release for Xbox Series X/S, PlayStation 5, and PC, and will be available on Game Pass.
State of Decay Developer Undead Labs Responds to 'Significant' Layoffs Following Independence from Xbox
State of Decay 3 developer Undead Labs has confirmed significant layoffs following its recent independence from Xbox. The studio's financial situation appears to be unstable after the split.
State of Decay 3 is building a deeper survival community, one now free from Xbox
Undead Labs has announced that State of Decay 3 is now an independent studio, free from Xbox ownership, and has reaffirmed its 2027 release date. This move comes after recent layoffs at Xbox, but the studio is committed to its community management and survival gameplay. The game is still slated for PC, PlayStation 5, and Xbox Series X|S, and will launch on Xbox Game Pass.
Undead Labs Goes Independent After Xbox Separation, Confirms State of Decay 3 Is Still In Development
Undead Labs has announced its separation from Xbox, becoming an independent, employee-owned developer. The studio confirmed that State of Decay 3 remains in development.