Got a tip from Mr. Disgusting, AfterTheAsylum, and a press release about it, but yes, a Zombie MMO is in the works. Undead Labs and veteran to the gaming industry Jeff Strain is behind the wheel.

They plan on bringing a huge zombie community to life, as this will be the only game they are working on. Undead Labs is committed to bringing to life an MMO loaded with action, humor and, of course, a lot of zombies, “because the world doesn’t any need more dragons”. No name, release date, screens, videos, systems, or anything else was announced. And I gotta be honest. That sucks. It’s like when they show you a teaser title for a movie not due out for another year. Except with video games it usually takes a lot longer. Bastards. “Every time I see a good zombie movie with friends, we spend days debating our strategies for surviving the zombie apocalypse,” said Strain. “The police station or the supermarket? Garden rake or staple gun? Bach or The White Stripes? I’m a game developer, so I’d probably be useless for anything other than ghoul bait, but I’m excited to have the opportunity to build an MMOZ that lets us put those strategies to the test and find out for sure.”
