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Undead Labs lays off "significant" staff after gaining independence from Xbox

Microsoft divested Undead Labs under same terms as Double Fine and Compulsion

2 Sep 22 11:23 AM · 1d ago · 3 articles · 2 sources · development 2 of 2

Reports clarified that Microsoft granted Undead Labs independence with IP, back catalogs, and runway funding—the same terms under which Double Fine and Compulsion split from Xbox earlier in 2026. Undead Labs will seek a new publisher for State of Decay 3 while maintaining the day-one Xbox Game Pass commitment.

Microsoft divested Undead Labs under same terms as Double Fine and Compulsion
gamedeveloper.com

“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.”

Undead Labs · techmeme ↗

Undead Labs Game developer, State of Decay studioMicrosoft Former parent company

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1Undead Labs announces independence and…2Microsoft divested Undead Labs under same…
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Reported in the same hours no headline names this development itself — these 1 claim were published in its stretch

  1. 2 outlets Undead Labs confirms it is now an "employee-owned studio", a "significant number" of employees face layoffs

    first by GamesIndustry.biz, 1d ago · also Game Developer

    1 more headline

All 2 developments of Undead Labs lays off "significant" staff after gaining… →

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