Undead Labs has announced its independence and is now operating as an “employee-owned game development studio.”
The State of Decay developer confirmed it had “completed its separation from Xbox” following an update to the platform holder’s ongoing reset yesterday.
“Independence brings us closer to our community and lets us focus on what matters most: making the best games we can and earning the continued support of the people who choose to spend their time with us,” said Undead Labs studio head Philip Holt.
“We’re enormously grateful for our years as part of Xbox and for everything that relationship has made possible. Microsoft has been part of the State of Decay story from the very beginning, and we’re proud of everything we’ve accomplished together.”
Development of State of Decay 3 “remains actively underway” as Undead Labs transitions to its new phase. The game is scheduled to launch in 2027 on Xbox, Game Pass, PC, and PlayStation, with a closed beta planned before the end of the year.
Undead Labs became independent as 268 positions were eliminated across Halo Studios, other first-party developers, and Xbox Game Studios yesterday.
UK studio Rare and the Halo franchise have been transferred to Activision. Obsidian is now part of Bethesda, and Playground Games and Turn 10 have merged into a single studio.
Microsoft said the next title in the Halo franchise would be “led by a new, purpose built team that is separate from ongoing development and plans for Call of Duty.”
“A small team at Halo Studios will continue supporting the Halo community and games in-market.”
Alongside Rare and Halo, Activision will also “expand its remit” to Age of Empires studio World’s Edge.
Ninja Theory is facing closure after two separate agreements failed. The Hellblade developer was among five studios divested during the first round of layoffs in July, along with Compulsion Games, Undead Labs, Double Fine Productions, and Arkane Lyon.
Compulsion Games and Double Fine previously confirmed their independence, while Arkane Lyon is still undergoing the consultation process.
Game Developer reported that an email from a senior leader to Blizzard employees indicates Blizzard is not affected by yesterday’s announcements.