Undead Labs becomes employee-owned after Microsoft buyout
The State of Decay 3 developer leaves Xbox Game Studios and will still launch its game day one on Game Pass.
Undead Labs, the developer behind State of Decay 3, is now an independent, employee-owned studio after leaving the Xbox Game Studios portfolio. Studio boss Philip Holt submitted a management-led acquisition offer, which Microsoft accepted, according to GameSpot.
Holt said the capital needed to finish State of Decay 3 was not insurmountable to raise independently. The game will still launch day one through Game Pass.
Holt credited Game Pass with helping the horror franchise reach 25 million players.
Long development under Xbox
State of Decay 3 was announced in 2020, partly to keep the project and studio on Microsoft's radar. Undead Labs was under the Xbox umbrella for eight years and never released a game during that time, while dropping 38 updates for State of Decay 2. A small team had been working on State of Decay 3 since 2020, with development picking up a few years later. Holt said announcing the game early helped the studio avoid being lost in the shuffle during Xbox's buying spree of publishers like Bethesda and Activision Blizzard. Undead Labs also had to cut staff as it entered a new era.
The studio joins Double Fine and Compulsion Games as former Xbox studios. After deals to acquire Ninja Theory fell through, it looks like the studio will soon be shut down.
Quick answers
Will State of Decay 3 still launch on Game Pass?
Yes, State of Decay 3 will still launch day one through Game Pass.
What happened to Undead Labs?
Undead Labs became an independent, employee-owned studio after a management-led buyout accepted by Microsoft, leaving the Xbox Game Studios portfolio.
How many players has the State of Decay franchise reached?
Holt credited Game Pass with helping the horror franchise reach 25 million players.