Video Games
‘State of Decay 3’ Dev Undead Labs Facing Potential Closure
Overshadowing the announcement of Ninja Theory’s third entry in the Hellblade series earlier this month were reports that the developer was facing possible closure by Microsoft, alongside South of Midnight developer Compulsion Games and Double Fine. Now according to a new story by GamesBeat, another developer under the Xbox Game Studios umbrella is potentially facing closure in Undead Labs, who are currently working on State of Decay 3.
Earlier this month, new Xbox CEO Asha Sharma had announced that Microsoft was in the process of ‘resetting’ Xbox. That resulted in a report by Bloomberg during Summer Game Fest that revealed that multiple developers were negotiating with Microsoft to spin off of Xbox to avoid closing down. Now, according to the GamesBeat report, Undead Labs is now part of that group of developers negotiating to be bought to avoid layoffs.
The article states that Undead Labs could lose 110 jobs if it were shut down, while Compulsion could lose 90 jobs, Ninja Theory could lose 135 jobs, and Double Fine Productions could lose 100 jobs.
Other developers and publishers at Microsoft also reportedly face cuts, including Blizzard, id Software and Bethesda.
Undead Labs was acquired by Microsoft back in 2018, with State of Decay 3 being announced in 2020. News on the development of the game was quiet until 2024, when a new trailer was released. Updates on the game again were hard to come by until last January when then-Xbox Game Studios lead Craig Duncan revealed that development was still very much alive. That was followed up this month with an official announcement that State of Decay 3 would be coming next year to PlayStation 5, Xbox Series, and PC via Steam and Microsoft Store.
Supermassive Games CEO Robert Henrysson took to LinkedIn to announce that he was stepping down from his post at the Directive 8020 and Little Nightmares 3 developer, and was leaving its parent company, Nordisk Games.
Henrysson’s announcement comes after the latest entry in The Dark Pictures franchise was released back in May.
“It’s been a fantastic time,” wrote Henrysson. “During my years as Chairman – and later as interim CEO – for Avalanche Studios Group – we saw the studio’s revenue and profit triple. As the CEO of Supermassive Games, I was honoured to guide the studio through intense industry change, broadening its client base and establishing a culture of consistent quality across all aspects of the game development process.
Leading a studio is never a one-man job — it is the entire team’s effort. Our commitment to continuous improvement was, and continues to be, central to everything we do. To everyone at Supermassive Games, I am so grateful for everything I’ve learnt and experienced with all of you. You are the greatest storytelling game studio on earth, you rock! And I wish you all the best in the future.”
Henrysson’s departure comes after Directive 8020 received mixed reviews from fans and reviewers alike (though we enjoyed it, and even included it on our list of best games so far this year). Little Nightmares 3, which was released last October, also experienced mixed reviews.
Supermassive experienced a rough time during the development of Directive 8020, with the game being delayed from its original release window, as well as a “reorganization” in 2024 that saw the studio lay off 30 percent of its staff.
Directive 8020 is available now on PlayStation 5, Xbox Series and Steam.