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Undead Labs Now Moves Forward as an Independent Studio

State of Decay 3 remains in development and is planned for a 2027 launch on Xbox, PlayStation, and PC, with closed beta testing planned before the end of 2026.

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A diner and abandoned vehicles in a zombie-infested setting from State of Decay 3.

Undead Labs is now moving forward as an independent, employee-owned studio after completing its separation from Xbox. The team announced the change through an official statement on the State of Decay website.

Microsoft and Undead Labs worked together for more than 15 years. The first State of Decay launched in 2013 through that partnership, and Microsoft acquired the studio in 2018, making this Undead Labs’ first period outside the company since the acquisition. The change arrives alongside Xbox layoffs and a wider studio reorganization.

Current plans for State of Decay 3 remain intact. The zombie survival game is still in active development and currently in alpha, with the alpha phase having begun in April 2026. A closed beta is planned before the end of 2026, followed by a 2027 launch across Xbox, PlayStation, and PC. The game also remains planned for Xbox Game Pass.

Undead Labs has outlined plans for more players and platforms to join later testing waves after the alpha phase, as detailed in its closed beta plans. Studio head Philip Holt said the independent structure will bring the team closer to its community and let it focus on making the best games it can. He also thanked Xbox for its long relationship with Undead Labs and its place in the State of Decay story.

Further plans for State of Decay 3 will be shared at a later date. For now, the project remains in alpha while Undead Labs prepares for its next testing phase as an independent studio.

What State of Decay 3 is building toward

Players will lead a community of survivors, build settlements, recruit members, and defend their people against zombies in a world set years after an outbreak nearly wiped out humanity. The Equilibrium has been disrupted, creating an evolving zombie threat, while player choices will shape where to settle, what to build, and whom to bring into the community.

Permadeath remains active for the whole community, so losing survivors can permanently change its future rather than ending the story for only one character.

A gameplay reveal trailer offers a look at the project’s survival-focused direction.

Will Undead Labs’ new ownership structure change how you view State of Decay 3‘s 2027 launch? Share your thoughts in the comments, and follow us on X, Bluesky, YouTube, Instagram, Steam, and Telegram.