Undead Labs, the studio behind the popular State of Decay franchise, was nearly acquired by Gears Tactics developer Splash Damage as part of Xbox’s ongoing corporate “reset.” However, that deal fell through, according to a new report that lines up with information Kotaku has heard about the Undead Labs situation.
On Tuesday, Undead Labs leadership announced that the studio, which Xbox bought in 2018, is still working on State of Decay 3, but is now fully free of Microsoft and employee-owned. However, this wasn’t always the plan. As reported by The Game Business, at one point UK developer Splash Damage (Brink, Enemy Territory) was in the process of acquiring Undead Labs. This deal was being funded via Splash Damage’s private equity backers, Emona Capital. This is the same group that also funds Secret Mode, the publisher behind the upcoming Star Wars: Galactic Racer. However, for whatever reason, this deal fell apart.
Kotaku corroborated these details via a source with knowledge of the situation.
After that deal fell through, Undead Labs leadership and staff were able to figure out a way to take control of the studio’s future themselves. It is now finishing up development on State of Decay 3, which currently has a yet-to-be-announced publisher.
It’s a happy ending for the studio, though layoffs recently hit Undead Labs as part of this shift to full independence. A similar situation occurred at the recently indie-again studio Double Fine. Meanwhile, it seems former Xbox-owned studio Ninja Theory, which also had deals lined up to be purchased that fell through, won’t be so lucky, as it begins the process of possibly closing down later this year.
This all comes in the wake of Xbox’s recent round of layoffs and corporate shifting, following earlier layoffs and tinkering that occurred in July. And there are even more changes and layoffs set to happen before the end of this year at Xbox under new boss Asha Sharma.