GTA 6 DEAL ▷
ReviewsFeaturesGuidesLists
GTA 6 DEAL ▷
ReviewsFeaturesGuidesLists

What Do the Xbox Layoffs Mean for State of Decay 3?

Xbox is dropping Undead Labs, leaving State of Decay 3's Game Pass launch up in the air.

A character in a red jacket with a backpack is fighting zombies in a forested area during twilight.
A character in a red jacket with a backpack is fighting zombies in a forested area during twilight.
alexa author
By Alexandria LopezStaff Writer

  • Primary Subject: State of Decay 3
  • Key Update: Xbox has confirmed it is divesting Undead Labs to new ownership, casting doubt on whether State of Decay 3 will still launch on Xbox Game Pass.
  • Status: Confirmed
  • Last Verified: July 6, 2026
  • Quick Answer: Undead Labs is leaving Xbox, meaning State of Decay 3 is no longer guaranteed for Game Pass, though its funding remains fully secured.

On July 6, Xbox CEO Asha Sharma announced that major internal changes will occur within the company.

These changes include several studios leaving Xbox, with Undead Labs, the studio behind the State of Decay franchise, being one of them. The news has many concerned about whether or not their latest title, State of Decay 3, will launch on Xbox Game Pass - or if it will release at all.

Here's everything we know about the situation.

What To Expect With State of Decay 3

Although Undead Labs will be leaving Xbox and entering new ownership, funding for State of Decay 3 will continue through the game's release.

A character running through a dark, fiery environment with creatures lurking in the background.
expand image
Credit: Undead Labs

What people are really curious about is if the game will still be coming to Xbox Game Pass. When State of Decay 3 was first announced, it was also confirmed the game would come to Game Pass on Day One. However, since the studio is parting ways with Xbox, this is no longer a certainty.

Game File has stated that the deal for Undead Labs included continued funding and the eventual release of State of Decay 3. However, there will no longer be an obligation to follow any Xbox-controlling terms. This means the studio is no longer required to release the title on Game Pass.

Undead Labs has yet to comment on the news, and the Game File report states that the new ownership will be announced later this Summer. The decision on whether or not to continue with the Game Pass release will most likely be announced once the studio settles with the transition.

State of Decay is expected to launch sometime in 2027 for Xbox Series X|S, PlayStation 5, and PC.

For more like this, stick with us here at Gfinityesports.com, the best website for gaming news, reviews, features, and guides.