Undead Labs, the developer behind State of Decay, is among Microsoft-owned studios facing potential closure as part of planned cuts to the Xbox division, according to reports from GamesBeat and Windows Central. The company has reportedly begun searching for a buyer for the Seattle-based studio. Should no investor step forward, closure of the developer and cancellation of State of Decay 3 would follow.
The announcement comes just weeks after State of Decay 3 was showcased at this month's Xbox Showcase and entered closed testing with players. The studio, acquired by Xbox following the 2018 release of State of Decay 2, employs approximately 110 people.
The situation is part of a broader restructuring effort at Xbox. Beyond Undead Labs, studios including Double Fine, Compulsion Games, Ninja Theory, and others have been cited as potentially at risk. Xbox unionists held a recent press conference demanding stronger worker protections and improved severance packages for employees affected by the announced cuts.
