Undead Labs
An American video game development studio best known for the State of Decay zombie-survival series.
Last updated August 22, 2026
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Overview
Undead Labs is an American video game development studio founded in Seattle, Washington, on November 23, 2009, by Jeff Strain. The studio was established with a focused creative brief: to develop games centered on zombies and the social, logistical, and moral pressures of surviving a large-scale outbreak. Its work became associated with open-world survival systems, persistent communities, base management, resource scarcity, player-driven storytelling, and the possibility that individual survivors could die permanently. The company’s first major commercial project was State of Decay. Before the game entered production, Undead Labs announced a publishing partnership with Microsoft Game Studios in February 2011. According to the studio’s account, several other publishers interested in the project wanted it reshaped into a massively multiplayer title resembling World of Warcraft, while Microsoft was willing to support the studio’s intended console-oriented survival design. State of Decay launched for Xbox 360 on June 5, 2013, followed by a Windows release on November 5 of the same year. Its combination of open-world exploration, community management, scavenging, construction, and permanent character loss established the foundation of the studio’s identity. In January 2014, Undead Labs announced a multiyear, multititle agreement with Microsoft Studios. The arrangement positioned State of Decay as a continuing franchise rather than a one-off experiment. The studio also developed Moonrise, a free-to-play creature-collection and competitive strategy game, but that project was shut down at the end of 2015. The company’s principal commercial and creative focus nevertheless remained the State of Decay series. Microsoft announced at E3 2018 that it had agreed to acquire Undead Labs, bringing the studio into Microsoft Studios, later renamed Xbox Game Studios. The acquisition gave the developer access to Microsoft’s publishing, technology, and platform infrastructure while preserving its role as a specialized first-party studio. In 2020, Undead Labs announced State of Decay 3 for Xbox and Windows. The studio later expanded its technical capabilities by opening a second location in Orlando, Florida, in July 2021. That team was described as concentrating on animation technology using Unreal Engine 5, both for Undead Labs and for other Xbox Game Studios teams. Founder Jeff Strain left the company by October 2021 and subsequently founded Possibility Space. A 2022 Kotaku investigation reported allegations of sexist and toxic workplace conditions, problems involving management and human resources, and high employee turnover. The report connected these issues with delays and uncertainty surrounding State of Decay 3, while employees also criticized Microsoft’s handling of diversity, equity, and inclusion concerns. Anne Schlosser was removed following a Microsoft human-resources investigation, according to the report. Undead Labs introduced a new logo and website in June 2024, coinciding with a new State of Decay 3 trailer shown during the Xbox Games Showcase. Reference material states that a later 2026 Xbox showcase presented another trailer and announced a 2027 release window for Windows, Xbox Series X|S, and PlayStation 5. The same material reports that Xbox considered selling or closing the studio during a 2026 restructuring and that a sale to an undisclosed buyer was announced in July 2026 but had not yet been finalized. Because the disclosed buyer, final ownership, and completed transaction are not established in the supplied material, Undead Labs’ present ownership and operating status remain uncertain.
History
Undead Labs was established on November 23, 2009, in Seattle by Jeff Strain. Its founding purpose was unusually narrow for a new studio: it wanted to build games about zombies rather than pursue a broad portfolio of genres. The concept that became State of Decay focused on the practical and social dimensions of an outbreak. Players would not merely fight enemies; they would search for supplies, establish bases, recruit survivors, manage a community, and deal with the lasting consequences of failure. On February 3, 2011, Undead Labs announced a partnership with Microsoft Game Studios. The partnership was significant because other interested publishers had reportedly encouraged the studio to turn its concept into a massively multiplayer game modeled on World of Warcraft. Microsoft instead supported the project’s intended direction and agreed to publish it on Xbox platforms, with Windows support also forming part of the arrangement. State of Decay was released for Xbox 360 on June 5, 2013, and for Windows on November 5, 2013. Its open-world structure and permanent-death mechanics became central to the studio’s reputation. The relationship with Microsoft deepened in January 2014, when Undead Labs announced a multiyear, multititle agreement with Microsoft Studios. The studio described State of Decay as the beginning of longer-term ambitions for the franchise. Its other significant project was Moonrise, a free-to-play game built around collecting and battling creatures. Moonrise was shut down at the end of 2015, leaving State of Decay as the company’s principal public identity. At E3 2018, Microsoft announced an agreement to acquire Undead Labs and bring it into Microsoft Studios. The corporate group was subsequently renamed Xbox Game Studios. As a first-party studio, Undead Labs continued work on its survival-game specialization while gaining access to Microsoft’s development and publishing resources. State of Decay 3 was announced in 2020 for Xbox Series X|S and Windows. In July 2021, Undead Labs opened a second studio in Orlando, Florida. The location was intended to develop animation technology in Unreal Engine 5 for Undead Labs and other Xbox Game Studios teams. Founder Jeff Strain left the company by October 2021 and later started Possibility Space. A 2022 Kotaku investigation alleged that the Seattle studio had experienced sexist behavior, toxic workplace conditions, management failures, and shortcomings in the handling of employee complaints. The report identified studio head Philip Holt and human-resources leader Anne Schlosser in its discussion of the environment. Schlosser was removed after a Microsoft HR investigation, according to the report. Former and current employees also described high turnover, limited design direction, and delays affecting State of Decay 3, while criticizing Microsoft’s handling of diversity, equity, and inclusion commitments. Undead Labs presented a revised visual identity in June 2024, including a new logo and website, alongside a State of Decay 3 trailer at the Xbox Showcase. Supplied reference material further states that a 2026 Xbox showcase showed another trailer and assigned the game a 2027 release date for Windows, Xbox Series X|S, and PlayStation 5. It also states that Xbox considered closing or selling Undead Labs during a 2026 gaming-business restructuring and later announced a sale to an undisclosed buyer in July. Since the buyer and completion status were not disclosed, the studio’s current corporate ownership cannot be stated with certainty.
- 2024
Brand refresh
[1]The studio launches a new logo and website while promoting State of Decay 3.
- 2021
Orlando location opens
[1]Undead Labs establishes an Orlando studio to work on Unreal Engine 5 animation technology.
- 2020
State of Decay 3 revealed
[1]The next major entry in the franchise is announced for Xbox Series X|S and Windows.
- 2018
Acquired by Microsoft
[1]Microsoft announces the acquisition of Undead Labs, making it part of Microsoft Studios and later Xbox Game Studios.
- 2015
Moonrise shuts down
[1]The studio ends operation of Moonrise at the close of the year.
- 2014
Multiyear Microsoft agreement
[1]Undead Labs signs a multiyear, multititle agreement with Microsoft Studios.
- 2013
State of Decay debuts
[1]The first State of Decay launches on Xbox 360 in June and Windows in November.
- 2011
Microsoft publishing partnership announced
[1]Undead Labs selects Microsoft Game Studios as a publishing partner for its planned Xbox and Windows projects.
- 2009
Undead Labs is founded
[1]Jeff Strain establishes Undead Labs in Seattle on November 23 with a dedicated focus on zombie-themed games.
Products and positioning
A specialist game-development studio focused on systemic zombie-survival experiences featuring open-world exploration, community management, resource scarcity, base building, consequential choices, and permanent character death.
Video game · 2013
State of Decay
Undead Labs’ first major release and the foundation of its signature franchise. It is an open-world zombie-survival game in which players explore a dangerous environment, gather supplies, establish and improve bases, recruit survivors, and manage a community under pressure. Characters can die permanently, making expeditions and resource decisions consequential. The game launched on Xbox 360 in 2013 and later on Windows.
Video game · 2018
State of Decay 2
The second mainline State of Decay title expands the series’ community-survival formula with broader cooperative play and additional management systems. Its core loop combines scavenging, base development, survivor recruitment, combat, and the persistent consequences of character death. The title belongs to the studio’s central franchise and continued its focus on emergent stories rather than a purely linear campaign.
Video game
Moonrise
Moonrise was a free-to-play creature-collection and strategy game developed by Undead Labs. It represented a departure from the studio’s zombie-survival focus, using collectible creatures and competitive play as its primary concepts. The service was discontinued at the end of 2015.
Video game
State of Decay 3
The announced next major entry in the State of Decay franchise. Reference material describes it as an Xbox and Windows project initially, with a later stated 2027 release plan for Windows, Xbox Series X|S, and PlayStation 5. Public development has been associated with delays and reported internal direction and workplace challenges. Its final release status and ownership context remain subject to change.
Controversies
2022
Workplace culture and management allegations
A Kotaku investigation reported allegations of sexism and a toxic workplace culture at Undead Labs, including criticism of management and human-resources practices. The report said Microsoft conducted an HR investigation and removed Anne Schlosser. It also described continuing morale and retention problems, delays to State of Decay 3, and employee concerns about Microsoft’s response to diversity, equity, and inclusion issues.
Marketing campaigns
- 2024State of Decay 3 Xbox Showcase promotion
Global
Undead Labs used the June 2024 Xbox Showcase to present a State of Decay 3 trailer and introduced a refreshed logo and website around the same period.
Outcome. The rebrand renewed public visibility for the studio and its next major game, although no completed release was reported in the supplied material.
Brand decisions
2026
Proposed sale to undisclosed buyerM&ABackground
Reference material states that Xbox considered selling or closing Undead Labs during a broader gaming-business restructuring.
Action taken
Xbox reportedly announced a sale of the studio to an undisclosed buyer in July 2026.
Aftermath
The supplied material says the sale had not yet been finalized, so the buyer and current ownership remain unknown.
2021
Expand into Orlando and Unreal Engine 5 technologyStrategyBackground
The studio sought additional technical capabilities for its own projects and for collaboration across Xbox Game Studios.
Action taken
Undead Labs opened a second studio in Orlando focused on animation technology in Unreal Engine 5.
Aftermath
The Orlando team was positioned to support Undead Labs and other Xbox studios, although later reported development problems affected State of Decay 3.
2018
Join Microsoft StudiosM&ABackground
Microsoft had already served as Undead Labs’ publishing partner for State of Decay.
Action taken
Microsoft announced an agreement to acquire the studio and integrate it into Microsoft Studios, later known as Xbox Game Studios.
Aftermath
Undead Labs became a first-party Xbox development studio and continued working on State of Decay 3.
2014
Sign multiyear, multititle agreement with MicrosoftStrategyBackground
State of Decay had become the studio’s defining project, and Undead Labs described the first game as the beginning of longer-term franchise ambitions.
Action taken
The studio entered a multiyear, multititle agreement with Microsoft Studios.
Aftermath
The agreement preceded Microsoft’s 2018 acquisition of Undead Labs and supported continued development of the State of Decay franchise.
2011
Choose Microsoft as publishing partnerStrategyBackground
Other publishers reportedly encouraged the studio to transform its zombie project into a massively multiplayer game modeled on World of Warcraft.
Action taken
Undead Labs partnered with Microsoft Game Studios, which supported the studio’s intended Xbox-focused survival-game direction.
Aftermath
The partnership led to the release of State of Decay and eventually developed into a multiyear agreement and Microsoft acquisition.
Sources3 sources
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