Undead Labs is moving to new ownership, and the zombie survival franchise may no longer be chained to Xbox Game Pass.
The studio behind State of Decay 3 was among the casualties of Xbox's massive restructuring, which saw CEO Asha Sharma announce 3,200 layoffs across the company. But Undead Labs won't be disappearing entirely. Instead, the developer is being handed off to a new owner with fresh funding to complete the long-delayed sequel.
The catch: the game will no longer be bound by Xbox's subscription service requirements. According to reporting on the arrangement, State of Decay 3 won't be obligated to launch on Game Pass, either on day one or at any point. That's a significant departure from the approach Microsoft took with State of Decay 2, which hit the service immediately upon release in 2018.
Undead Labs was acquired by Microsoft years ago, and State of Decay 3 had been in development as an Xbox exclusive. The shift to independent ownership changes that calculus entirely. The identity of the new owner remains under wraps, with reports suggesting an official reveal later this summer.
The decision reflects broader cracks in Xbox's subscription strategy. Game Pass, once positioned as the centerpiece of Microsoft's gaming future, has stumbled. The service shed millions of subscribers after price increases in October, forcing the company to cut costs and reset its approach. Sharma acknowledged in recent comments that Game Pass "did not grow at the pace" Microsoft expected, and the company has since lowered subscription tiers, though not to pre-hike levels.
For fans of the franchise, the implications are murky. State of Decay 3 was announced in August 2020 and remains in active development. Whether it eventually arrives on Game Pass will now depend on the new owner's business strategy, not Xbox's requirements. Players who were banking on day-one access through the subscription service should recalibrate expectations.
Author Emily Chen: "Microsoft's fire sale of its premier studios is reshaping what Xbox exclusivity even means anymore, and Game Pass's weakness is suddenly everyone's problem to solve."
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