Undead Labs, the studio behind the zombie survival series State of Decay, has successfully navigated its separation from Xbox. Following a deal to be acquired by Splash Damage that ultimately did not materialize, the Seattle-based developer secured financing for a management buyout, marking a significant shift in its operational calculus.
Studio head Philip Holt detailed the transition in an interview, explaining the studio's new focus on establishing a durable cost structure to ensure survival and ongoing support beyond the launch of its upcoming title, State of Decay 3. This contrasts with its previous objective as a first-party Xbox studio, where the aim was for State of Decay to achieve tentpole status.
State of Decay 3 was initially revealed in 2020 with a cinematic teaser, which offered a glimpse into the game's intended atmosphere but did not reflect completed development. Holt acknowledged this early reveal as a strategic move to signal the studio's ambitions during a period of significant acquisitions within Xbox. However, without the full backing of Xbox and following recent layoffs, the studio faces the challenge of managing its development timeline effectively to avoid further staff reductions.
Moving forward, Undead Labs will operate as an employee-owned company, with stock to be distributed to staff in the coming weeks. The acquisition vehicle Holt created is named Full Measure, a nod to the Gettysburg Address and a philosophy that emphasizes a team's commitment. This commitment, Holt stated, translates into practical actions such as employee ownership and transparent communication, especially regarding both positive and negative developments.
The studio plans to begin sign-ups for a closed beta of State of Decay 3 on PC soon, with a full alpha test scheduled for 2027. While specific details regarding the publisher and the number of employees affected by recent layoffs remain undisclosed, the immediate focus for Undead Labs is on achieving a sustainable future as an independent entity.