Microsoft is reportedly considering either selling Undead Labs or shutting it down, even after State of Decay 3 showed up again at the June 2026 Xbox Games Showcase. If that happens, roughly 110 jobs could be on the line, and it would throw State of Decay 3 back into doubt right after the game finally got a gameplay trailer, a 2027 release window, and, according to reports, had already reached alpha on PlayStation 5, Xbox Series X/S, and PC.
State of Decay 3 was first announced in 2020. Later on, developers at Undead Labs said that at the time, the project was barely more than a text document.
The studio’s time under Microsoft hasn’t exactly been smooth, either. Microsoft bought Undead Labs in 2018, and by 2022 there were already reports describing misogyny, bad management, and production trouble connected to the game’s slow development.
If you’ve been waiting on State of Decay 3, keep an eye on this one. Reports have also mentioned Ninja Theory, Double Fine Productions, and Compulsion Games, as Microsoft keeps pushing multiplatform releases, leans hard on Xbox Game Pass, and deals with June 30 fiscal year-end approaches.
Journalists, fans, and the Communications Workers of America (CWA) have already weighed in. Microsoft, though, still hasn’t confirmed any final decision.
If everything stays on track and the 2027 plan holds, you’ll be able to play State of Decay 3 on PlayStation 5, Xbox Series X/S, and PC.
Author: Jesús Bosque
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