Undead Labs speaks about its split from Xbox, revealing it has to “make some changes” to State of Decay 3 following layoffs
Undead Labs has reclaimed independence from Xbox Game Studios, completing its departure last month. Studio head Phillip Holt revealed the split necessitates adjustments to State of Decay 3, the co-op zombie survival game currently in development.
The separation brought significant workforce reductions, which Holt described as “total heartbreak.” Despite the layoffs and their cascading impact on the project, Holt affirmed the studio is “pretty close to finishing” State of Decay 3 and highlighted the extensive content planned for the game.
With Xbox no longer serving as the studio’s corporate parent, Undead Labs now operates as an independent entity answering directly to its audience rather than a corporate “boss.” This structural shift comes as the studio navigates the final development stages of State of Decay 3 while managing the challenges imposed by its reduced team.
The studio’s newfound autonomy represents a significant transition after years under Microsoft ownership, positioning Undead Labs to chart its own creative and business direction going forward.