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1Repair Windows errors before they cause bigger problems2Fix the driver behind crashes, sound loss and screen glitches3Clear out junk files and repair common Windows errorsUndead Labs has completed its separation from Xbox and says it is now an independent, employee-owned studio. Studio Head Philip Holt describes a sharp change in the business goal: inside Xbox, State of Decay could be built into a major first-party franchise with enough support; as an independent company, Undead Labs must control costs, reach launch and earn enough revenue to sustain itself. The studio says State of Decay 3 remains in development, with a 2027 release target—not a guaranteed date.
What changed when Undead Labs left Xbox?
Undead Labs announced that its separation from Xbox is complete and that the studio is independent and employee-owned. The studio says its relationship with Microsoft spans more than 15 years: the original State of Decay launched in 2013 in partnership with Microsoft, and Microsoft acquired Undead Labs in 2018. Undead Labs’ announcement
| # | Preview | Product | Price | |
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| 1 |
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State of Decay 2 - Ultimate Edition - Xbox One | $100.16 | Buy on Amazon |
| 2 |
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State of Decay- Year-One Survival Edition | $35.99 | Buy on Amazon |
| 3 |
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Desperados 3 - Xbox One | $15.00 | Buy on Amazon |
| 4 |
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No More Heroes 3 – Day 1 Edition - Xbox Series X | $21.79 | Buy on Amazon |
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Studio Head Philip Holt told The Game Business that Microsoft’s divestiture process accelerated, prompting him to submit an offer for a management-led acquisition. He believed the capital needed to complete State of Decay 3 could be secured. The financing ultimately came through a publisher relationship rather than outside investors; Holt did not name the publisher or disclose the deal’s financial terms.
Holt said all Full Measure shareholders are Undead Labs employees and that the company was in the process of issuing stock options to all staff. The studio has not published final ownership allocations or percentages, so “employee-owned” does not establish that every employee holds an equal stake.
#1 Best Overall
- State of Decay 2 Ultimate Edition includes early access to the full game, a code for the original State of Decay: Year One Survival Edition on console, and a code for two add-on content packs: Independence Pack and Daybreak Pack
- Build your community and invite up to three friends to explore an open world filled with hostile zombies Four Player Co-Op Multiplayer Establish a base, develop your characters and manage resources to survive in a post-apocalyptic world
- Model Compatibility: Xbox One;Xbox One X Enhanced with higher resolutions, steadier framerates and better effects
- Pre-order now to get the Amazon exclusive Survivor’s Pack Includes the Zed Swatter melee weapon, an exclusive vehicle and an assortment of survival supplies and abilities - Codes will be received within 7 days of release
Why did the studio’s business calculus change?
Holt’s distinction is between a first-party investment thesis and the requirements of running an independent company. Under Xbox, the ambition was to give State of Decay enough support to become a tentpole alongside Xbox’s biggest franchises. Independence makes the studio responsible for matching its costs to the revenue its own games generate.
“Inside of first party, the idea for State of Decay has always been that given proper support, it could ascend to tentpole status alongside some of the biggest brands inside Xbox. As an independent company, we have to make sure that we can survive and that we have a durable cost structure that’s going to not only get us through launch, but we’ll be supported by the revenue that we produce.”
Rank #2
State of Decay- Year-One Survival Edition
- Unlocking Heroes: Lifeline Roster
- New weapons: Under-barrel attachments and Incendiary Ammo
- New Music
- Community Improvements
That is not the same as saying Xbox did not care about making a good game. Holt acknowledged that making the best possible game was also a primary objective there. His point is that independence gives the studio a more direct line between its audience and the business decisions it must make.
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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteHe also described Seattle’s high labor costs as part of the funding challenge, alongside the expense of maintaining a team and the speed at which decisions need to be made. Holt said the studio wants to compete by entertaining an audience, rather than by racing to the bottom on labor costs. In his words, “As long as I have an audience that appreciates what we make, then we scale the business to the size of that demand.”
Rank #3
- Command up to five desperados and use their lethal skills to stealthily thin out the enemy rows
- Approach each mission with a variety of different solutions and paths
- Resolve seemingly impossible large enemy setups with careful planning and perfectly timed execution of the team's special skills
- Witness the glory of classic Wild West scenarios like frontier towns, desert canyons, Mississippi swamps, sprawling modern cities and many more by day and night
- Defeat your foes choosing between deadly and non-lethal options, stealth and blazing guns and further adjust the game to your playstyle
What does independence mean for State of Decay 3?
Holt said a significant number of people left the studio and that the departures required changes to State of Decay 3. He said there was no need for a radical rescope. He declined to give a layoff total, saying he did not want to reduce the impact on friends and colleagues to a statistic.
The game remains in development. Undead Labs’ announcement said it was in alpha and that the team was working toward a closed beta before the end of 2026. The studio set 2027 as its release target for Xbox, Game Pass, PC and PlayStation. Xbox Wire also described 2027 as the target in its June 2026 feature. These are public plans, not a confirmed launch date, and may change.
Rank #4
- Day 1 Edition contains a 5.3” x 7.3” softcover 70-page art book, a CD featuring select songs from the soundtrack, and a 7” x 4” Santa Destroy commemorative biker license plate, all in a custom box with an original illustration
- Grow Your Galactic Legend - In classic No More Heroes style, the Galactic Superhero Rankings are packed with outrageous boss battles, each oozing with personality; Soar through the ranks and prove you're the baddest in the universe
- Old Dog, New Tricks - From beam katana boss to wrestling pro, Travis can do it all; Take violence to new extremes with the customizable Death Glove, and punish those deadly invaders with combat that suits your style
- Superheroic Side Hustles - Explore Santa Destroy on Travis’ Demzamtiger to pick up odd jobs, from Coast Guard missions to toilet cleaning, then hit the road to unique locales like Neo Brazil and Thunderdome to keep the cash rolling in
- Bolder, Badder, and Better Than Ever - Thanks to sharper visuals, No More Heroes 3 has never looked better; Add in improved load times and better responsiveness, and you’ll be dishing out eye-popping ultra-violence in no time
Holt said co-development teams Virtuos, Wushu and Blind Squirrel are supporting work on the game. Their involvement is part of the development arrangement he described; the sources do not specify individual studios’ responsibilities.
What kind of game is planned?
In Xbox Wire’s June 7, 2026 feature, Creative Director Kevin Patzelt described State of Decay 3 as a survival sandbox with solo play and shared-world co-op for up to four players. Planned systems include survivor communities, settlements, scavenging, crafting and dynamic Plague Nests.
Patzelt said the playable space is about four times the size of a single State of Decay 2 map. That is his comparison of the planned space, not an independently measured map-size result. The feature offers a picture of the game’s intended scope, but it does not change the studio’s stated 2027 target or make that date certain.
What does the studio’s history say about its support model?
Holt said Undead Labs released 38 updates for State of Decay 2 during its eight years as an Xbox studio. That figure describes ongoing updates to the existing game, not 38 new releases. It offers context for the studio’s track record of supporting a game over time, but it does not establish what post-launch support for State of Decay 3 will look like under the independent business model.
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