Undead Labs goes employee-owned after Microsoft divestment
The State of Decay studio has secured a publishing deal with an unnamed partner to finish State of Decay 3, due in 2027.
Undead Labs has become employee-owned and independent after Microsoft divested the studio, gamesindustry.biz reported. The State of Decay maker has also secured a publishing deal with a publisher it has not yet named to help finish State of Decay 3.
The studio registered a new Delaware C corporation that acquired Undead Labs and is issuing equity to all employees. CEO Philip Holt holds a minority ownership position backed by super-voting stock that gives him voting control.
The arrangement was financed without outside investors, and Undead Labs said it took no external funding to complete the game. State of Decay 3 carries a 2027 release window.
The divestment follows Xbox's announcement in July 2026 that it planned to sell off five studios, Undead Labs among them. Microsoft had acquired the studio in 2018.
Quick answers
Who owns Undead Labs now?
The studio is employee-owned. A new Delaware C corporation acquired Undead Labs and is issuing equity to all employees, with CEO Philip Holt holding a minority stake and voting control.
When is State of Decay 3 coming out?
State of Decay 3 has a 2027 release window.
Who is publishing State of Decay 3?
Undead Labs has a publishing deal with a publisher it has not yet named.