Key information
Undead Labs has officially transitioned to an independent studio following a management buyout after being included in a 2026 summer Xbox restructuring. Despite recent layoffs, studio head Philip Holt confirmed that development of State of Decay 3 continues, with the team aiming to produce the best possible game while adapting to a new, sustainable cost structure.
While the departure of staff necessitated adjustments to the project, Holt stated that the game is already in an alpha state and will not undergo significant downsizing. The studio is currently receiving development support from three external partners: Virtuos, Wushu, and Blind Squirrel.
Holt explained that the 2020 announcement was made early to establish the studio's creative vision amid concerns regarding Microsoft's acquisition strategy at the time. Although the initial trailer featured conceptual elements like a zombie deer that will not appear in the final product, full-scale development only commenced between 2022 and 2023.
The title remains scheduled for release on PC, PS5, and Xbox Series X|S. Furthermore, the studio maintains its commitment to launch the game on Xbox Game Pass, acknowledging the platform's vital role in supporting the series' player base.
