"It's difficult to reach this moment knowing that not everyone who helped get us here gets to make the rest of the journey with us."

State of Decay studio Undead Labs has shared good and bad news following Xbox's second round of job cuts this year.

The good news is that Undead Labs, owned by Microsoft since 2018, has gone independent and is worker-owned as well, the studio said in a statement on its website. The bad news is that the studio is laying off "a significant number" of staff in doing so, the company added on LinkedIn.

"Independence brings us closer to our community and lets us focus on what matters most: making the best games we can and earning the continued support of the people who choose to spend their time with us," Undead Labs studio head Philip Holt said in the website statement.

"Unfortunately," Undead Labs added on LinkedIn, "today we are also saying goodbye to a significant number of our colleagues. It's difficult to reach this moment knowing that not everyone who helped get us here gets to make the rest of the journey with us.

"There have been far too many announcements like this across the industry, and we hate adding to that list. These are people we'd hire again in a heartbeat, and we hope the industry takes notice."

Undead Labs was one of the studios Xbox said it was parting with when Microsoft announced the beginning of its restructuring this summer. At the time, Microsoft said it had found a buyer for the studio, but didn't name them. Microsoft also said a similar thing about Ninja Theory, another studio it previously owned, though it announced yesterday that it may have to close the studio after two deals fell through.

State of Decay 3 remains in development, and the studio reiterated its aim for the game to enter closed beta before the end of the year, with 2027 remaining as the release target. State of Decay 3 also remains a Game Pass game, Xbox Studios boss Matt Booty wrote in his message to staff about restructuring yesterday. There had been concern the game wouldn't launch into Game Pass post-separation.

Booty's message also said State of Decay 3 has a new publisher, though once again did not name them. It's also in development for PC and PlayStation, alongside Xbox.

Undead Labs' separation from Xbox brings a 15-year partnership to an end. Xbox published the charming if scrappy zombie survival game State of Decay in 2013, before acquiring the studio in 2018 mere days after State of Decay 2 was released - a sequel we didn't like at all.

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