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Another Xbox studio may be on the chopping block for closure, weeks after it revealed its latest game.
Earlier this month, it was reported by several games industry insiders that Compulsion Games, Ninja Theory, and Double Fine Productions are set to be either closed down or sold off by Xbox.
Despite these companies producing games that became critical darlings, they have been less-profitable than other games under Microsoft’s wing.
It’s now being reported that Undead Labs, the developer behind the State of Decay series, may also be part of these closures. What’s worse, this comes just weeks after it had a new reveal for State of Decay 3 at the Xbox Games Showcase earlier this month.
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As reported by Dean Takahashi from GamesBeat, Undead Labs has been added to the list of developers at risk of layoffs or closure, with 110 jobs at risk if it does.
Takahashi adds that around 435 jobs would be at risk due to the closures, with Compulsion losing 90 jobs, Double Fine Productions losing 100 jobs, and Ninja Theory losing 135 jobs.
Other studios under Microsoft’s banner are also said to be affected by layoffs, such as Blizzard and Bethesda, with Takahashi’s source calling it “the biggest single cut series for Xbox”.
He says that Microsoft would be preparing to take action in early July after closing its financial quarter, which occurs on June 30.
Earlier this month, Undead Labs launched a new reveal of State of Decay 3, publishing a load of new gameplay for fans to watch. A playable alpha was also launched earlier this year, giving players hands-on experience with an early version of the game.
This is a similar story to Ninja Theory, creator of the Hellblade series, which also announced Senua at the Xbox Games Showcase with a release window of 2027.
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Undead Labs was founded in 2009 by Jeff Strain and partnered with Microsoft for the release of its first game, State of Decay, on the Xbox 360 in 2013.
The game was a success for Xbox Live Arcade, which led to the studio signing a multi-title agreement with Microsoft. Two years later, it released State of Decay: Year One Edition, which included a next-gen upgrade, improved visuals, and all DLC included.
This was later followed by State of Decay 2, which was released for PC and Xbox One in 2018, along with the company being acquired by Microsoft and becoming an Xbox studio. An updated version, titled State of Decay 2: Juggernaut Edition, came out in 2020.
Finally, State of Decay 3 was announced in 2020, but apparently only existed “as a Word document” at the time. Undead Labs has shown only small snippets of the game over the years, with the biggest reveals occurring earlier this year when the game was shown off at the Xbox Games Showcase.
With the studio now set to either close or be sold off, there’s no telling whether the company will be able to finally release the third game to the public.
