1 source 1m ago
Undead Labs Goes Independent With Employee Ownership After Xbox Sale Fails
Undead Labs, the developer of State of Decay 3, became independent through a management buyout after Xbox's plan to sell the studio fell through, studio head Philip Holt told GamesIndustry.biz. Holt called the period "a truly painful three months."
Reporting from 1 source: Game Spark.
Why it matters
The studio that Xbox put up for sale in July 2026 now holds its own fate, with an unnamed publisher contract and employee ownership replacing the first-party backing it lost.
Key Facts
- Xbox announced a plan in July 2026 to sell five studios, including Undead Labs.
- Undead Labs became independent through a management buyout after the sale did not go through.
- Studio head Philip Holt called the transition "a truly painful three months."
- Undead Labs signed a contract with an unnamed publisher and expects to finish State of Decay 3 without outside investment.
- Undead Labs disclosed layoffs on September 23 and is moving to an employee-owned structure.
The studio signed a contract with an unnamed publisher and expects to finish State of Decay 3 without outside investment. It also laid off a "considerable number" of staff and is moving to an employee-owned structure.
Holt said staff were shocked by the July 2026 sale announcement and feared both for their jobs and for whether State of Decay 3 would ever ship. The studio responded by sending company information to all employees every week and opening direct discussions, which Holt said settled the mood and strengthened trust.
The buyout leaves Holt without a majority stake. He keeps management control through a class of shares with stronger voting rights. The studio did not disclose how many people it laid off after independence, and Holt said he wants to avoid turning departed staff into a headline number.
Written with AI by Yomimono from the 1 cited source below, including Japanese-language reporting where cited. See our editorial policy.
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