Undead Labs Says State of Decay 3 Still Targets 2027 After Layoffs
Studio head Philip Holt said staff were told in advance about likely layoffs as Undead Labs left Xbox, and confirmed the 2027 release window for State of Decay 3.
Undead Labs studio head Philip Holt said the studio was open with its staff about likely layoffs as it transitioned away from Xbox, and confirmed that State of Decay 3 remains on target for a 2027 release. Holt made the comments in an interview with The Game Business, according to gamedeveloper.com.
Undead Labs also confirmed on LinkedIn that the layoffs were significant. The studio did not provide a figure for the number of roles affected.
The cuts came as Undead Labs moved to independent ownership. The studio retained the State of Decay property as part of that transition.
Background
In July 2025, Xbox announced plans to divest Undead Labs from its Xbox Game Studios portfolio. Layoffs followed in late September 2025 as part of the divestiture and the studio's pivot to independent ownership. State of Decay 3 had been announced under the Xbox banner in 2020, two years after Microsoft acquired the studio.
Quick answers
When is State of Decay 3 coming out?
Undead Labs studio head Philip Holt said the game is still on target for a 2027 release.
Did Undead Labs have layoffs?
Yes. Undead Labs confirmed on LinkedIn that the layoffs, which took place during its transition away from Xbox, were significant.
Who owns the State of Decay property now?
Undead Labs is now independent and retained the State of Decay property.