Undead Labs confirms it is now an employee-owned studio, with a significant number of layoffs

Undead Labs announced it has completed its separation from Xbox and is now operating as an employee-owned game development studio, with a significant number of employees made redundant. The studio said development of State of Decay 3 remains actively underway, with a 2027 launch planned for Xbox, Game Pass, PC and PlayStation and a closed beta before the end of the year. The move came as Microsoft eliminated 268 positions across its first-party studios and shifted Rare and the Halo franchise to Activision.