Microsoft’s ongoing restructuring of its gaming division continues to raise eyebrows, particularly regarding the fate of Undead Labs. The studio, known for the State of Decay franchise, is set to be divested as part of a broader cost-cutting initiative led by Microsoft CFO Amy Hood. This move comes despite State of Decay 3 generating significant consumer interest on PC platforms.
The wishlist numbers tell a different story
Data from SteamDB reveals that State of Decay 3 is currently the 28th most wishlisted game on the platform. More notably, its popularity exceeds that of other major Xbox-first titles, including Halo Campaign Evolved and Gears of War: E-Day. Among upcoming Xbox games, only the high-budget title Fable currently holds a higher position in Steam wishlist rankings.
This level of pre-release interest suggests a strong existing fanbase eager for the next entry in the survival horror series. The game promises an evolving multiplayer experience with optional four-player co-op, allowing players to manage communities of survivors in a dynamic zombie apocalypse sandbox.
A history of disruption at Undead Labs
Undead Labs was acquired by Microsoft in 2018 as part of an effort to bolster Xbox’s exclusive content library. However, the integration has been fraught with challenges. Studio co-founder and leader Jeff Strain departed in 2019, shortly after the acquisition. The studio then faced significant disruptions due to lockdown regimes during the COVID-19 pandemic.
These factors delayed full development of State of Decay 3, which was announced in 2020 but did not enter active production until much later. Instead, the team focused on free updates for State of Decay 2. Critics argue that Microsoft’s financial strategies failed to account for these mitigating factors, leading to hasty decisions regarding the studio’s future.
What this means for Xbox fans
The divestiture of Undead Labs is part of a larger wave of layoffs affecting nearly 5,000 Microsoft employees, with approximately 3,200 roles cut within Xbox alone. Other studios, such as Obsidian and id Software, have also seen significant reductions despite recent successes like Grounded 2 and DOOM: The Dark Ages. For everyday gamers, this shift raises questions about the long-term stability of beloved franchises and whether Microsoft’s focus on AI infrastructure is coming at the expense of its gaming heritage.
While some studios have found buyers, the uncertainty remains high for developers who may not be as fortunate. The departure of Undead Labs highlights a broader trend of short-sighted fiscal management within the company, potentially impacting the quality and continuity of future Xbox titles.
Source: Windows Central
Over to you: Do you think Microsoft should have waited longer to see the success of State of Decay 3 before divesting Undead Labs?
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