Undead Labs Reportedly at Risk of Closure Amid Xbox Studio Cuts
Reports say Microsoft may unload Undead Labs after its fiscal year ends if a buyer can't be found, putting the future of State of Decay 3 in doubt. Other Xbox first-party studios have also been linked to potential closures or buyouts.
Reports that Microsoft plans large layoffs across its Xbox division include rumours that first-party studios such as Double Fine, Compulsion Games and Ninja Theory are negotiating to avoid full closure. Now GamesBeat and Windows Central say Undead Labs could be among the studios Microsoft may unload after its fiscal year ends on June 30. The move is notable because Xbox recently promoted State of Decay 3 with a new trailer; that game is believed to be nearly finished, and its release would be uncertain if Undead Labs closes. Bloomberg’s Jason Schreier didn’t confirm Undead Labs specifically but wrote it’s “possible (even likely) ... that some of the studios that are lined up for closure will be spun out and taken independent again by their management, potentially saving some jobs.” Some layoffs still appear inevitable. State of Decay 3 is currently expected on Xbox Series X|S, PlayStation 5 and PC in 2027, and developers across Xbox studios have asked Microsoft for layoff protections ahead of potential cuts this summer.
