Undead Labs has made the unfortunate decision to conduct a "significant amount" of layoffs following its split from Microsoft.
State of Decay developer Undead Labs is now free from Xbox. They're an independent developer now and can run their own business. Microsoft chose to divest key studios like Undead Labs rather than shut them down, giving groups opportunities to find new deals with other partners. While Undead Labs has found a publisher for State of Decay 3, the Seattle-based studio is still making drastic cuts to stay operational.
"Undead Labs is becoming an independent, employee-owned studio. Unfortunately, today we are also saying goodbye to a significant number of our colleagues. It's difficult to reach this moment knowing that not everyone who helped get us here gets to make the rest of the journey with us," the studio writes on LinkedIn.
- Read more: Xbox may close 5 studios in July layoffs, including Arkane, Compulsion, Ninja Theory and more
- Read more: State of Decay 3's 2020 reveal trailer was just a concept, and zombie deer won't be on the menu in the final game
- Read more: Microsoft's job cuts go beyond Xbox, with 2.1% of its global workforce affected
One of the more interesting parts of Undead Labs' journey is that their live service zombie game, State of Decay 2, was actually popular. The game reached 1 million players in just two days after release and eventually went on to reach over 10 million people in a span of a few years.
So the games that the studio makes are popular, and incidentally, a lot of the decisions that are happening now aren't always a result of poor sales or that a game did badly. The layoff sprees that we see are a result of many factors, but the principal one is the higher cost of living adjustments that have happened across the United States. This compounds over a team and significantly drives up personnel costs.
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Undead hasn't revealed the partner that's funding State of Decay 3's development, but that project is due out sometime in 2027 and it'll still launch on Xbox Game Pass when it's out.
