- Xbox could shut down State of Decay 3 studio Undead Labs as part of its major reset.
- The game is nearly finished, but it could be cancelled if the company can’t find a buyer.
- Other studios like Ninja Theory and Compulsion Games are facing a similar fate.
Layoffs have been rampant in the gaming industry this year, with powerhouses like Epic firing over 1,000 people thanks to the AI boom. Studios under the care of gaming giants like Xbox and PlayStation have also been under constant threat of closure, with Bungie losing 50% of its developers just recently.
Reports this month have suggested that Xbox is about to undergo a historic round of layoffs that will affect most of its studios. As it turns out, even developers whose new game launches next year aren’t safe and might be shut down.
Why it matters: If studios with finished games can face closure in the gaming industry, no one is safe from the wrath of profit incentives.
As reported by Windows Central, State of Decay 3 developer Undead Labs could be shut down as part of Asha Sharma’s Xbox reset, leading to the game’s cancellation. Microsoft is currently trying to offload the studio, but if the company can’t find a buyer, Undead Labs will cease to exist.
State of Decay 3, which was a part of the recent Xbox Games Showcase, is nearly finished and is set for a 2027 launch. However, according to the report, if Xbox can’t find a suitable buyer, the upcoming title will be canned, and the 110 employees working at the studio will lose their jobs.
These massive cuts at Xbox are being led by Microsoft’s corporate CFO, Amy Hood, who wants the gaming giant to offset its losses by eliminating entire studios. Previous reports revealed that layoffs have already begun at South of the Midnight developer Compulsion Games.
In addition, the existence of Hellblade creator Ninja Theory and Double Fine is also uncertain. Xbox is in talks with leadership at these studios to find an external solution, but only time will tell how this situation pans out.
Do you think there is a way out for all of these talented developers? Are these studios going down just to meet profit margins? Tell us in the comments below or head to the Tech4Gamers forum for discussion.
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Shameer Sarfaraz has previously worked for eXputer as a Senior News Writer for several years. Now with Tech4Gamers, he loves to devoutly keep up with the latest gaming and entertainment industries. He has a Bachelor’s Degree in Computer Science and years of experience reporting on games. Besides his passion for breaking news stories, Shahmeer loves spending his leisure time farming away in Stardew Valley. VGC, IGN, GameSpot, Game Rant, TheGamer, GamingBolt, The Verge, NME, Metro, Dot Esports, GameByte, Kotaku Australia, PC Gamer, and more have cited his articles.
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