Despite Microsoft’s sweeping Xbox restructuring, there is some good news for fans of the State of Decay franchise. While Undead Labs is leaving Xbox Game Studios, State of Decay 3 remains in active development and has not been cancelled.
Undead Labs moves to new ownership
As part of Xbox’s major restructuring, Microsoft confirmed that Undead Labs will transition to new ownership rather than be shut down. According to the company, the move is intended to provide the studio with dedicated funding and support to complete its current project while continuing to operate independently from Xbox.
Microsoft has not yet revealed who the new owner will be.
State of Decay 3 continues development
Following the announcement, many fans feared that State of Decay 3 had become another casualty of the restructuring. Microsoft has since clarified that this is not the case.
Development on the long-awaited zombie survival sequel will continue under the studio’s new ownership, ensuring that the project remains alive despite the major organizational changes taking place within Xbox.
Game Pass future uncertain
One of the biggest unanswered questions is whether State of Decay 3 will still launch on Xbox Game Pass.
With Undead Labs no longer being an Xbox-owned studio, there is currently no confirmation that the game will release through Microsoft’s subscription service. While Xbox has not announced any changes to the game’s release plans, its future distribution strategy remains unclear.
A difficult journey
State of Decay 3 has already faced a challenging development cycle. Over the past few years, reports have highlighted leadership changes, employee turnover, and internal development struggles that contributed to a lengthy production process.
Even so, the project has now survived Xbox’s largest restructuring to date, giving fans renewed hope that the next entry in the popular zombie survival series will eventually reach players.
For now, State of Decay 3 remains in development, while the gaming industry waits to learn who will take ownership of Undead Labs and what the future holds for both the studio and the franchise.
