Xbox Layoffs Put State of Decay 3 Game Pass Future in Doubt, Report Says
Xbox is dealing with a serious shake-up after announcing a sweeping round of layoffs that is reportedly hitting nearly every studio the company operates. In some cases, the impact is limited to job cuts, but Xbox has also moved to fully close the chapter on certain teams—specifically Ninja Theory, Compulsion Games, Double Fine, Arkane Lyon, and Undead Labs, the studio behind State of Decay 3.
Layoffs, studio closures, and what it means for State of Decay 3
| Studio | Status | Notes |
|---|---|---|
| Ninja Theory | Parted ways | Included in the studio closures tied to the layoffs. |
| Compulsion Games | Parted ways | Included in the studio closures tied to the layoffs. |
| Double Fine | Parted ways | Included in the studio closures tied to the layoffs. |
| Arkane Lyon | Parted ways | Included in the studio closures tied to the layoffs. |
| Undead Labs | Being transferred | Xbox says it has entered terms for new ownership; the buyer has not been named yet, with details expected later this summer. |
For Undead Labs, the situation is being framed differently: the studio has already been acquired by another company, or at least is on the path to it. Xbox CEO Asha Sharman said in a statement that Undead Labs has “entered terms to join new ownership,” while also noting that the identity of the new owner hasn’t been shared yet. The announcement is reportedly planned for later this summer.
State of Decay 3 and Game Pass: where the deal could get messy
That’s clearly a win for Undead Labs, since it means the team can keep working on State of Decay 3 without going through the same layoffs. Still, it creates a thorny question for Microsoft and its subscription strategy.
A claim has been circulating that part of the arrangement that moves Undead Labs out from under Microsoft included a stipulation preventing any requirement for State of Decay 3 to launch on Xbox Game Pass. If that’s accurate, then the game’s day-one subscription status could be less certain than Xbox’s earlier messaging suggested.
Even with the problems Xbox is facing right now—and those it hasn’t fully worked through yet—CEO Asha Sharman still expressed confidence that the platform can “entertain a billion people a day.”
To understand why fans are now uneasy, it helps to look back at Xbox’s more recent showcase. During that event, State of Decay 3 was supported by a relatively long gameplay trailer, and nearly every segment of the presentation was paired with the idea that the title would be hitting Game Pass.
After revisiting the showcase footage, Xbox appears to have made a direct promise that you’ll be able to play State of Decay 3 “day one with Game Pass.”
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Even if the new ownership deal removes Microsoft’s obligation to include the game on Game Pass at launch, that doesn’t automatically mean State of Decay 3 won’t show up there. Microsoft could still attempt to make it happen if it wanted to, and some players argue it should—especially if Xbox wants audiences to trust the commitments it makes during its showcases.
With this situation, plus the ongoing fallout around Hellblade, skepticism toward Xbox’s promotional statements has been hard to shake. Reversing a Game Pass promise now would likely do little to rebuild confidence with the audience that tunes in expecting clarity.
