Undead Labs independent and worker-owned after Xbox restructuring

The transition comes with layoffs. According to the report, a significant number of employees are being let go, but no exact figure has been given.

State of Decay 3 remains in development. The available information does not say exactly what the new ownership structure means for the game’s release or publishing plans.

What happened

Eurogamer reports that Undead Labs, the studio behind the State of Decay series, is breaking away from Xbox and Microsoft. Studio head Philip Holt says in that report that the new status should bring the studio closer to the community and help it focus on making the best games. The same report describes the studio as independent and worker-owned, but does not explain exactly how that setup is structured legally or organizationally.

What is clear is that Microsoft has owned Undead Labs since 2018. That year, Xbox announced during E3 that Undead Labs was joining Microsoft Studios. This latest change means the studio is now continuing outside that structure after eight years under Microsoft/Xbox. The available sources do not name a buyer, although the context notes that Microsoft said during this summer’s restructuring that it had found a buyer for Undead Labs.

The transition also has staffing consequences. According to the source, Undead Labs is laying off a significant number of employees, but no exact number is given. That means it is still unclear how many people are directly affected by the restructuring. The available information does confirm that the layoffs are part of the same transition in which the studio becomes independent.

State of Decay 3 is still in development. The sources do not provide a full picture of what the new independence means for the game’s schedule, release, or any possible partnership around it. No concrete release date is mentioned in the supplied information either. What is clear is that the studio is still carrying the franchise and that development on the third game has not been halted.

Background

Undead Labs is the developer of State of Decay and State of Decay 3. The studio was founded in 2009 and became a familiar name in Xbox’s portfolio after Microsoft brought it under its wing in 2018. This latest move means the studio is once again operating independently, but now with a worker-owned label that is not further explained in the supplied sources.

The term worker-owned is a key part of the announcement in the available information, but the exact split of ownership, control, or any share structure is not described. That leaves open how the studio is run day to day and what role Microsoft, a potential buyer, or the employees themselves have in that setup. The sources only confirm that Microsoft is no longer the direct owner as it had been since 2018.

There are also still several unanswered questions on the business side of the transition. Microsoft previously said during this summer’s restructuring that it had found a buyer for Undead Labs, but the name of that party is not included in the supplied information. As a result, it is not possible to determine whether the current independence came through a sale, a spin-off, or some other arrangement.

The situation around State of Decay 3 is similarly limited. The available sources say the game is still in development, but provide no concrete information about a release window, a publisher, or any change in production planning. For now, the only clear takeaway is that the franchise continues under the studio’s new status.

Related GAME-scanner articles

• Undead Labs is now independent and says State of Decay 3 is still on track

Sources

• Eurogamer: Undead Labs independent after Xbox restructuring
• Xbox Wire: E3 2018 — Undead Labs joins Microsoft Studios