Undead Labs Goes Independent As State Of Decay 3 Enters Alpha
An Xbox studio that could not be sold has instead been bought back by its own management, and the terms of that survival, post-launch revenue rather than first-party funding, now shape what State of Decay 3 is allowed to become.
Reporting from 1 source: Game Spark.
Undead Labs has left the Xbox umbrella through a management buyout after a sale to a new owner did not go through. Studio head Philip Holt told The Game Business that layoffs announced on September 23 mean State of Decay 3 needs changes, but the game is already at the alpha stage and does not require a major scale-down. Virtuos, Wushu and Blind Squirrel are supporting co-development. Full-scale production began around 2022-2023.
The buyout followed a failed sale. Undead Labs was among the studios put up for sale in the summer 2026 restructuring of the Xbox business, and negotiations toward a new owner went nowhere before management took the studio independent. Holt said funding through launch is secured by a contract with a publisher, but that the cost structure still needs review, because the studio now has to survive on post-launch revenue. He declined to give the number of layoffs, saying he did not want to reduce people to statistics.
Synthesized by Yomimono from the 1 cited source below, including Japanese-language reporting where cited, then editorially reviewed before publishing.