Undead Labs has announced that it has transitioned into an "employee-owned studio"

State of Decay 3. A person wearing a blue baseball cap, grey sweater, and camouflage pants holds a crossbow, with a large backpack on their back. In the background, a weathered sign for 'USED CARS' is visible against a cloudy sky. — Image credit: Undead Labs

Undead Labs has declared its newfound status as an "employee-owned game development studio," indicating its breakaway from Xbox.

The studio behind State of Decay shared that it has "successfully parted ways with Xbox" after yesterday's developments in Microsoft's restructuring.

Philip Holt, the head of Undead Labs, expressed that this autonomy enhances their engagement with the gaming community and focuses on producing high-quality games to maintain player support.

While expressing appreciation for their journey with Xbox, Holt acknowledged Microsoft's essential role in the State of Decay series from its inception and recounted their shared accomplishments.

The third installment of the State of Decay series is actively being developed. This title is anticipated to release in 2027 on multiple platforms including Xbox, Game Pass, PC, and PlayStation, with a closed beta scheduled later this year.

The establishment of Undead Labs as an independent entity coincided with 268 job cuts across Halo Studios, other first-party creators, and Xbox Game Studios following yesterday's transitions.

The iconic UK studio Rare and the Halo series are now associated with Activision. Moreover, Obsidian has joined Bethesda, and there's a consolidation of Playground Games and Turn 10.

The future development of the Halo series will be spearheaded by a new team distinct from current Call of Duty projects, according to Microsoft's announcement.

A segment of Halo Studios will remain engaged in supporting the existing Halo community and ongoing game services.

Activision is also set to enhance its scope with the involvement of Age of Empires creator World's Edge.

Ninja Theory is heading towards closure after two proposed initiatives did not succeed, being one of the five studios released during the initial round of layoffs in July, along with Compulsion Games, Undead Labs, Double Fine Productions, and Arkane Lyon.

Independence has also been confirmed by Compulsion Games and Double Fine, while Arkane Lyon is still consulting on its future.

Meanwhile, assurance from a Blizzard senior leader's email noted by Game Developer suggests Blizzard remains unaffected by the recent news.