Undead Labs is now an independent, employee-owned studio after completing its separation from XBOX, and State of Decay 3 is still targeting a 2027 release. When XBOX announced the reset in July, Undead Labs and Ninja Theory were the two departing studios said to have terms in place with new, unnamed owners, while Compulsion Games and Double Fine were being returned to their management teams. Earlier today, Matt Booty’s memo on the latest round of cuts said Undead Labs had transitioned on terms similar to those two studios, and the announcement from Undead Labs fills in the rest: the new owners are its own employees. The “new publisher” Booty referred to for State of Decay 3 still hasn’t been named.
Development on State of Decay 3 is actively underway, according to the studio, with the game currently in alpha and the team still working toward the closed beta it committed to before the end of the year. Alpha playtests started in May after signups opened in April, and creative director Kevin Patzelt said last month that both the alpha and the closed beta would keep expanding to more players over time, since this is the studio’s largest map yet and the game runs untethered multiplayer that needs stress testing. The full release remains targeted for 2027 on PlayStation 5, XBOX Series X|S, and PC, and it’s still set to be a day one Game Pass title.
The transition ends a relationship between Undead Labs and Microsoft that spans more than 15 years. The original State of Decay launched in 2013 in partnership with Microsoft, and Microsoft acquired the studio in 2018 as part of the same acquisition wave that brought in Ninja Theory, Compulsion Games, and Playground Games. Of those four, Compulsion Games and Undead Labs have since gone independent, Ninja Theory is facing a proposed closure, and Playground is the only one staying put, now merging with Turn 10. “Independence brings us closer to our community and lets us focus on what matters most: making the best games we can and earning the continued support of the people who choose to spend their time with us,” said Philip Holt, studio head of Undead Labs. “State of Decay exists because millions of players have made that choice over the years, and we’re dedicated to honoring their trust.”
Undead Labs says additional details about its plans will be shared at a later date, and players can keep up through StateofDecay.com or sign up for future State of Decay 3 playtesting at playtest.stateofdecay.com. “We’re enormously grateful for our years as part of XBOX and for everything that relationship has made possible,” Holt said. “Microsoft has been part of the State of Decay story from the very beginning, and we’re proud of everything we’ve accomplished together.”
