Full Breakdown
Undead Labs Becomes Employee-Owned, Confirms State of Decay 3 Still in Development
By Drooid · · How we work
Core Announcement and Development Status
In a blog post scheduled for September 22, Undead Labs disclosed that the studio has separated from Xbox and is now an independent, employee-owned company. The post also confirmed that *State of Decay 3* remains in active development, currently in an alpha stage with a closed beta slated for the end of 2026 and a full launch planned for 2027 on Xbox, Game Pass, PC, and PlayStation.
Background and Industry Context
The announcement follows a broader restructuring at Xbox that began earlier this summer, during which Microsoft has divested several studios. Notable examples include Double Fine, which retained full ownership of its intellectual property, and Activision’s takeover of the *Halo* franchise with Rare placed under its umbrella. Undead Labs’ move mirrors these recent separations, positioning the studio to continue its work outside Microsoft’s direct control.
Official Statements and Responses
Studio Head Phillip Holt emphasized that employee ownership brings the team closer to its community and allows a sharper focus on game quality. He expressed gratitude for the partnership with Microsoft, noting that the collaboration helped launch the *State of Decay* series and that the studio remains committed to honoring player trust. The statement framed independence as a strategic step toward sustaining the franchise’s growth.
Impact of Employee Ownership and Platform Strategy
Industry observers note that the employee-owned model may enhance creative autonomy while preserving access to a large subscriber base through Game Pass. Fans have reacted positively, highlighting the perceived “double win” of studio independence coupled with continued availability on a major subscription service. The arrangement could serve as a template for other studios seeking both financial stability and creative freedom.
Timeline and Key Milestones
- September 22 (scheduled): Blog post announcing independence and development status.
- Alpha phase: Ongoing as of the announcement.
- Late 2026: Planned closed beta launch.
- 2027: Targeted full release across Xbox, Game Pass, PC, and PlayStation.
These milestones outline the studio’s roadmap from its newly independent status to the eventual market launch of *State of Decay 3*.