Undead Labs, the studio responsible for the zombie survival series State of Decay, was close to being acquired by Splash Damage, the developer behind Brink and Enemy Territory. This potential deal was being facilitated by Splash Damage's private equity backers, Emona Capital, the same entity that funds Secret Mode, publisher of the upcoming Star Wars: Galactic Racer.
According to reports corroborated by Kotaku, the acquisition by Splash Damage was part of a broader restructuring effort by Xbox. However, the deal ultimately fell through for unspecified reasons. Following the collapse of this acquisition, Undead Labs leadership and its employees were able to secure the studio's future independently. The studio, which was originally acquired by Xbox in 2018, is now employee-owned and continues its work on State of Decay 3.
This transition to independence has not been without its challenges. Undead Labs recently underwent layoffs as part of this shift, a situation that mirrors changes at other former Xbox-owned studios. For instance, Double Fine also became independent following a similar process. In contrast, Ninja Theory, another studio that had potential acquisition deals fall apart, is reportedly facing potential closure later this year.
These events are occurring amidst a period of significant corporate changes and layoffs at Xbox, which began earlier this year and are expected to continue under new leadership. Despite these shifts, Undead Labs is committed to completing State of Decay 3, with a publisher for the game yet to be announced.