Undead Labs completes its separation from Xbox as an employee-owned studio

The State of Decay developer says the divestiture is complete, though financial terms were not disclosed. Its next game remains in alpha and is still targeting a 2027 multiplatform release.

Microsoft acquired Undead Labs in 2018 after publishing the original State of Decay in 2013. The studio now controls its operations as an independent business owned by employees, while development continues for Xbox, Game Pass, PC and PlayStation.

The ownership change is material because it separates a long-running first-party team without cancelling its flagship project or limiting the announced platform plan. Undead Labs says more information about its future plans will follow, so the transaction structure and any continuing commercial agreements remain undisclosed.