Undead Labs Regains Independence and Cuts Staff

The Seattle-based game studio Undead Labs has returned to independence after buying itself back from Microsoft. The move occurred during the Big Xbox Reset, a restructuring effort led by Xbox CEO Asha Sharma that involved studio mergers and divestments across the division.

Following its separation from Xbox, the studio implemented significant layoffs. Studio Head Philip Holt stated that the staff reductions will not impact the launch of State of Decay 3, which remains in active development. While the studio initially targeted a launch for next year, updated reports indicate the title is now targeting a 2027 release for Xbox, Game Pass, PC, and PlayStation 5.

Despite its independent status, the studio confirmed that State of Decay 3 will launch on the Game Pass subscription service on day one. Holt noted that independence allows the team to focus more closely on its community and game quality, while additional playtesting for the upcoming title is scheduled for the coming months.