Undead Labs, the studio behind the upcoming State of Decay 3, has announced today that after more than a decade under Xbox ownership, it has officially completed the separation process and is now an independent game development studio. And it is still working on State of Decay 3.
On September 22, Undead Labs confirmed it had finalized and finished the process of freeing itself from Xbox. We knew this was in the works, as in July, Xbox announced plans to lay off thousands of employees and to spin off some of its game studios, letting them go indie. Undead Labs was one of those studios. And now, it has finished that process and is a fully indie, employee-owned company.
“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 Undead Labs studio head Philip Holt. “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 also confirmed it is continuing to work on State of Decay 3. According to the studio, the upcoming zombie game is currently in alpha, and the team is still working toward the previously announced closed beta set to arrive before the end of the year. State of Decay 3 is still targeting a 2027 launch on PS5, Xbox, and PC. It will also still arrive on Game Pass.
In 2013, Undead Labs launched the original State of Decay with the help of Xbox. In 2018, Undead Labs launched State of Decay 2, and Xbox purchased the studio and folded it into its larger Xbox Games Studio portfolio. Since then, the team has been working on State of Decay 3, though behind the scenes, Kotaku reported that employees alleged burnout, harassment, and a toxic work environment at the company, which likely contributed to the game’s extended development.
Sadly, another studio that Xbox announced was trying to transition to being a fully indie studio didn’t work out. On Tuesday, Xbox confirmed two deals fell through and now Hellblade devs Ninja Theory are in the process of closing down. Other studios like Double Fine and Compulsion Games have already made the leap to becoming indie studios once more.