Undead Labs has completed its split from Xbox to become an independent employee owned studio. The developer confirmed that work on State of Decay 3 continues uninterrupted with an internal alpha build currently running and a planned 2027 launch target. The upcoming survival sequel is also expanding beyond Microsoft hardware to release on PlayStation alongside PC and Xbox platforms.
This separation wraps up an 8 year run as a first party Microsoft studio. Undead Labs originally partnered with Microsoft back in 2013 to launch the first State of Decay before being fully acquired in 2018. Studio Head Philip Holt explained that regaining independence lets the team focus directly on player trust.
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.
Despite the major corporate change, the production timeline for State of Decay 3 remains on track. The development team is currently testing an alpha build and aims to launch a closed beta test before the end of this year. When the game arrives in 2027 it will launch on Game Pass, Xbox, and PC, while also expanding the franchise reach by landing on PlayStation hardware on day 1.
Leadership made it clear that the separation from Microsoft was smooth after a partnership spanning more than 15 years. Philip Holt emphasized that the studio remains thankful for what both teams built together.
Microsoft has been part of the State of Decay story from the very beginning, and we are proud of everything we have accomplished together.
The move gives Undead Labs full control over its creative roadmap while allowing Microsoft to retain the game on its subscription service when it finally ships.
