State of Decay 3 Report: No Forced Xbox Game Pass Drop After Microsoft Sale

Undead Labs’ long-awaited plans for State of Decay 3 may not include an automatic stop on Xbox Game Pass, even as the studio moves into new ownership following Microsoft’s recent shake-up.

Ownership changes after Xbox restructuring

Reports tied to the studio’s post-Microsoft future suggest that State of Decay 3 won’t be forced into any specific Game Pass arrangement. The update comes as Xbox CEO Asha Sharma announced layoffs impacting 3,200 employees across the current financial year, and it also surfaced alongside broader headlines claiming both Ninja Theory and Undead Labs are preparing to change hands.

Sharma said that Ninja Theory and Undead Labs “have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3.”

For Undead Labs, the change is described as a bittersweet moment: the team behind the third main entry in the State of Decay series—one that has spent years in development—will continue its work as its next owner takes over. The report notes that extra details about who the new owners are have not been made public.

What the deal reportedly means for Game Pass

One claim in the coverage says the organization taking over Undead Labs will be revealed later this summer, though no specific date was provided.

While Microsoft’s arrangement with the studio reportedly didn’t spell out every detail of the new structure, the reporting states that State of Decay 3 will still receive funding. At the same time, the game is not expected to have to follow “any Xbox-controlling terms.”

• State of Decay 3 is not required to launch on Xbox Game Pass.
• Funding for the project is expected to continue despite the lack of Xbox-specific obligations.

Why Game Pass fans are watching closely

For players who have been waiting on State of Decay 3, the news lands hard. Subscribers have had the sequel on their radar since it was announced almost seven years ago, in August 2020. The series itself began in 2013, years before Game Pass launched in 2017, but the second game in the franchise did arrive as a day-one release on the subscription service in 2018.

With Undead Labs stepping into a new chapter, the series’ future in relation to Game Pass is now less predictable—meaning fans may not want to assume the post-apocalyptic franchise will be tied to the service at launch, or potentially at all.

The wider context also includes Sharma’s comment that Game Pass is one of the few areas of Xbox that “did not grow at the pace” the company expected. Earlier, in June, chief strategy officer Matthew Ball said the subscription service “shed millions of subscribers” after major price increases hit last October.

Microsoft later announced in April of this year that it would lower the price of Game Pass, though not all the way back to the levels seen before the hikes. In June, Sharma told Bloomberg that the company was “able to reset Game Pass after an eight-month decline.” The current subscriber count was not stated clearly in the coverage.

Community check: Game Pass subscription question

As Xbox moves through what’s being described as a “reset,” players can track the changes in real time—especially as studios become newly independent, including Double Fine Productions and Compulsion Games.

Michael Cripe is a freelance writer with IGN. He’s best known for his work at sites like The Pitch, The Escapist, and OnlySP. Be sure to give him a follow on Bluesky (@mikecripe.bsky.social) and Twitter (@MikeCripe).