Undead Labs, the studio behind State of Decay 3, is under threat of closure

Microsoft is considering selling the developer.

The future of Undead Labs, known for the State of Decay series, is in question. According to GamesBeat, Microsoft is considering selling the developer, and if unsuccessful, its closure is not ruled out.

According to the published information, the corporation continues to search for a buyer for the 17-year-old studio. If the deal does not go through, about 110 employees could lose their jobs. Sources also note that Undead Labs has joined the list of internal Xbox studios whose future raises serious questions.

Against this backdrop, the situation around State of Decay 3 looks particularly alarming. The game was announced at the Xbox Games Showcase in 2020, but the first full gameplay was shown only six years later – during the Xbox Games Showcase 2026.

Despite the uncertainty surrounding the developer, State of Decay 3 is still scheduled for release in 2027. The project is expected to be released on Xbox, PlayStation 5, and PC.