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Home»News»[Updated] Undead Labs, the studio behind State Of Decay 3, would be at risk of closure
[Updated] Undead Labs, the studio behind State Of Decay 3, would be at risk of closure
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[Updated] Undead Labs, the studio behind State Of Decay 3, would be at risk of closure

Adrián FuentesBy Adrián Fuentes30 June, 2026No Comments

A new report places Undead Labs, Ninja Theory, Compulsion Games and Double Fine among the teams that could be affected by Microsoft's upcoming restructuring.

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Update

Shortly after the report was published, Bloomberg journalist Jason Schreier provided new insights into the situation. Schreier claims that he cannot confirm the rumor about Undead Labs, so for now, there is no evidence to support the speculation that the State of Decay 3 studio will be affected in the way that has been suggested.

Additionally, the journalist labeled the report that stated Double Fine, Compulsion Games, Ninja Theory, and Undead Labs would need to find a buyer to survive as “fundamentally incorrect”. According to him, although the possibility of some studios regaining their independence exists and is even considered “possible (even likely)” in certain cases, this does not mean that all of them depend on a sale to avoid closure.

Original News

The latest hours have been particularly intense for Xbox news. The rumors that have been pointing to a major internal reorganization within Xbox Games Studios are now joined by a new report that talks about a possible wave of layoffs that would affect several of the company’s most well-known studios.

For now, there is no official announcement from Microsoft, so all this information should be treated with caution. Even so, various publications agree that the next few days could be decisive for the future of several Xbox Game Studios teams.

GamesBeat points to hundreds of layoffs, but Jason Schreier questions part of the report

According to GamesBeat, Microsoft is preparing a significant round of cuts that could affect over 400 employees across several internal studios. The names mentioned include Undead Labs, responsible for State of Decay 3; Ninja Theory, creators of Senua’s Saga: Hellblade II; Compulsion Games, authors of South of Midnight; and Double Fine Productions.

The report even suggests that some of these studios may face closures or deep restructuring if Microsoft does not find an alternative solution for them.

However, shortly after the information was published, Bloomberg journalist Jason Schreier stepped in to question part of the report. Schreier stated that some of the data disseminated by GamesBeat would be incorrect and pointed out that, in certain cases, one of the options being considered would be to return some studios to independence instead of proceeding with their direct closure.

For now, Microsoft remains silent and has not confirmed any of this information. Everything suggests that it will be in the coming days, once the company’s current fiscal quarter ends, that the plans for Xbox will be officially announced. Until then, it’s best to take these reports with caution and wait for Microsoft to clarify the future of its studios and the projects they are currently developing.

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This content has been automatically translated from the original material. Due to the nuances of machine translation, there may be slight differences. For the original version,click here.
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Adrián Fuentes
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Founder and editor of SoloXboxOne and Generación Xbox. He is also one of the owners of the GX Group, Samsung Universe and the Reflotes forum. Adrian has reviewed over 200 games on the web and has an average score of 85 according to Opencritic. Among his expertise as a writer and analyst, he has interviewed Microsoft personalities and participated in private gaming events.


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