News & Commentary

Undead Labs Got Its Name Back. Here's What Independence Cost.

The State of Decay studio left Xbox as an employee-owned indie on September 22 - and said goodbye to a 'significant' number of developers the same day.

Undead Labs announced on September 22 that it has separated from Xbox and is now an independent, employee-owned studio - and in the same announcement said it was losing a "significant" number of colleagues, per Kotaku. One source told Kotaku up to 40 people were affected; the studio hasn't given a number. State of Decay 3 is still in development, with a closed beta promised as early as the end of 2026.

If you run a studio, or want to, this is about the clearest price tag on independence the industry has put in public this year.

The cynical read is "freedom, paid for with layoffs." For the people let go, that isn't cynical. It's just what happened.

But look at what the studio walked out with. Kotaku reports the studios Xbox released left with their IP, their back catalogs and runway funding. That's the real test of independence - not the name on the door, but whether you own the thing you're making and have the cash to finish it. And with employee ownership, the people who stayed now own the risk too.

Watch who the "new publisher" turns out to be. Independence with a publisher attached is a different shape of independence.