Undead Labs bought back its independence from Microsoft last month and subsequently had to cut staff. According to Eurogamer, the studio revealed it has "got to make some changes" to State of Decay 3 because of those layoffs.
Studio head Philip Holt explained in an interview that the game was announced early in 2020 precisely to keep the project and Undead Labs on Microsoft's radar during the company's acquisition spree, as reported by GameSpot. Holt said he was "a little concerned with the possibility of being swallowed or even sold off."
Despite leaving Xbox Studios, State of Decay 3 will still launch on Game Pass day one in 2027. According to Pure Xbox, Holt stated that "of the players we capture, we capture for a long time," justifying the platform's continued partnership. Undead Labs has already opened sign-ups for beta testing of the game, initially on PC, with expansion to PlayStation 5 and Xbox Series X|S planned for the future, as announced on the official Discord.
