Undead Labs Facing Potential Closure Amid Microsoft Layoffs

Amid reports of Microsoft planning layoffs in its Xbox gaming division, Undead Labs, the developer of State of Decay, is at risk of closure if a buyer isn't found.

Undead Labs is among the studios that Microsoft may sell off after the current fiscal year ends on June 30. Despite promotional efforts for State of Decay 3, including a recent trailer, the fate of the game remains uncertain if the studio shuts down. Bloomberg's Jason Schreier mentioned the possibility of some studios being spun out independently to save jobs but layoffs seem inevitable.

State of Decay 3, set for release on Xbox Series X|S, PS5, and PC in 2027, faces an uncertain future amidst calls for layoff protections from Xbox developers. Rumors also hint at Xbox potentially becoming a separate entity from Microsoft, with possible price hikes on consoles. Microsoft's CEO emphasizes the need for Xbox to improve financially, hinting at more significant changes to come.