Undead Labs lays off staff after splitting from Xbox, will find a new publisher for State of Decay 3

Undead Labs has become an independent, employee-owned studio after divesting from Xbox, and announced it is laying off a significant number of employees, some of whom worked on State of Decay 3. The studio will now work with a new publisher to release State of Decay 3, which is still slated for a day one launch on Xbox Game Pass. Microsoft said the studio regained independence on terms similar to Double Fine and Compulsion, which split from Xbox earlier this year with their IP, back catalogs and runway funding.