Undead Labs will no longer be part of Xbox Game Studios, but it won’t be shut down. Instead, the development studio will operate independently going forward.
In view of Microsoft’s Xbox restructuring measures, the fate of Undead Labs is also unclear and has been in a state of limbo for a long time. There have been rumors of closure in the past, but luckily that didn’t materialize. Instead, Undead Labs will operate as an independent development studio in the future, separate from Xbox Game Studios.
The official website confirmed that they have separated from Microsoft’s Xbox division and are returning as independent developers for the first time since 2018. This is also good news for survival sequel State of Decay 3, as it won’t be scrapped but will be actively developed further.
State of Decay 3 is currently in alpha stage. The plan is still to release a full version for PC, PlayStation and Xbox next year in 2027. And: Despite Microsoft’s shutdown, the game should eventually appear on Xbox Game Pass.
Regarding going independent, studio head Philip Holt said: “Our independence brings us closer to the community and allows us to focus on what matters most: creating the best game possible and earning the lasting support of the people who spend time with us. State of Decay exists because millions of players have chosen it over the years – and we are determined to honor that trust.”
Undead Labs remains “extremely grateful” for its long-term, positive relationship with Microsoft Xbox. We are “proud of what we have achieved together”.
