State of Decay 3 has officially been reconfirmed as a day-one Xbox Game Pass release despite developer Undead Labs completing its separation from Microsoft. Xbox Game Pass subscribers have eagerly awaited State of Decay 3 for years, while Undead Labs says the open-world zombie survival sequel is currently targeting a 2027 launch.
First announced in 2020, State of Decay 3 finally received its first gameplay reveal during the Xbox Games Showcase in June 2026. The sequel greatly expands the series’ survival sandbox formula with a much larger shared open world, multiple settlements, deeper community management, and online co-op for up to four players. Undead Labs has said its new map is roughly four times the playable size of a single State of Decay 2 map, while untethered multiplayer lets players share a world and pursue objectives independently. The game is currently planned for Xbox Series X/S, PS5, and PC, making it one of the more notable upcoming Xbox Game Pass games scheduled for 2027.
State of Decay 3 Is Still Coming to Xbox Game Pass Day One
Microsoft has now confirmed that State of Decay 3 will still launch day one on Game Pass after Undead Labs successfully completed its transition away from Xbox. In a September 22 update on the company’s ongoing restructuring, Microsoft said Undead Labs has officially separated from the company on terms similar to Compulsion Games and Double Fine, which returned to management with their IP, back catalogs, and runway funding. Going forward, State of Decay 3 will be released with a new publisher, though Microsoft did not identify that company. Undead Labs separately confirmed that it is now operating as an independent, employee-owned studio.
Drag weapons to fill the grid
Drag weapons to fill the grid
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That confirmation may be particularly reassuring to fans because Undead Labs’ future with Microsoft had been uncertain since the Xbox restructuring announced in July. At the time, Microsoft said Undead Labs had entered terms to join new ownership and would receive funding to complete and grow State of Decay 3. Xbox continued listing the game as coming to Game Pass afterward, but the studio had not yet finished its transition. The final arrangement ended up looking somewhat different, with Undead Labs now identifying itself as an independent studio under no official ownership. With that process now complete, one of the biggest uncertainties surrounding State of Decay 3‘s post-Microsoft release plan has finally been resolved.
Development of State of Decay 3 also appears to be moving steadily toward the planned 2027 launch. Undead Labs began alpha testing earlier in 2026 and announced in August that closed beta playtests would begin before the end of the year. Creative director Kevin Patzelt said broader testing is especially important because State of Decay 3 features the largest map in series history alongside untethered multiplayer, both of which require extensive stress testing and refinement.
Undead Labs’ completed separation marks a major change for a studio that Microsoft acquired in 2018 after years of working closely together on the State of Decay series. Its next game will now come from a newly independent, employee-owned Undead Labs, untethered to the Xbox Game Studios umbrella. Following today’s announcement, studio head Philip Holt stated, “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,” seemingly excited about the new direction of Undead Labs. Several questions remain, including who will publish the game and when exactly it will arrive in 2027, but whether it will be available through Xbox Game Pass on release day is no longer among them.
- Released
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2027
- ESRB
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m
- Publisher(s)
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Xbox Game Studios
- Engine
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Unreal Engine 5
