State of Decay 3 remains in development after Undead Labs splits from Xbox

• The studio says State of Decay 3 is still in development; Microsoft confirms the game will launch day one on Xbox Game Pass.
• Kotaku also reports the game is in alpha and still targeting a closed beta by the end of the year, though those details have not been separately confirmed elsewhere.

What happened

Undead Labs announced on October 28, 2024 that it had completed its split from Xbox. Studio head Philip Holt described the studio as fully independent and employee-owned. In the same communication, Undead Labs said work on State of Decay 3 is continuing.

Gamespot then reported that Microsoft has confirmed State of Decay 3 will arrive on Xbox Game Pass on day one when it launches. That keeps the game tied to Microsoft’s subscription service, even though Undead Labs is now operating separately from Xbox as an organization.

Kotaku added that State of Decay 3 is currently in alpha and is still aiming for a closed beta before the end of the year. The available sources also mention a possible 2027 release and a PS5 version, but those plans have not been independently confirmed in the material provided.

Background

State of Decay 3 is the next game in Undead Labs’ survival series. The studio was part of Xbox for years, but now describes itself as independent and employee-owned. That means the franchise remains with the developer that built it, while the studio’s corporate structure has changed.

The reporting also mentions a new publisher being involved with State of Decay 3, but that party is not named. As a result, it remains unclear how the game’s publishing arrangement is structured and what role that publisher plays alongside Undead Labs and Microsoft.

The available sources do not provide a release window or launch date for State of Decay 3. The only firm scheduling detail mentioned is that the game is set to launch day one on Xbox Game Pass.

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• Ninja Theory starts consultation over proposed closure after two failed deals

Sources

• Gamespot: State of Decay 3 lives on and is still coming to Game Pass
• Kotaku: State of Decay 3 studio announces it’s now free from Xbox and employee-owned