--- title: "It was a pretty harrowing three months" – Undead Labs... description: Undead Labs CEO Philip Holt describes a harrowing three months after Xbox announced it would divest the studio in July. The team feared unemployment and that... canonical: https://daily.dev/posts/it-was-a-pretty-harrowing-three-months-undead-labs-head-philip-holt-on-what-happened-after-xbox--xm2yec5jg twitter:card: summary_large_image twitter:site: @dailydotdev og:type: website og:site_name: daily.dev og:title: "It was a pretty harrowing three months" – Undead Labs head Philip Holt on what happened after Xbox cut the studio loose | daily.dev og:description: Undead Labs CEO Philip Holt describes a harrowing three months after Xbox announced it would divest the studio in July. The team feared unemployment and that... og:url: https://daily.dev/posts/it-was-a-pretty-harrowing-three-months-undead-labs-head-philip-holt-on-what-happened-after-xbox--xm2yec5jg og:image: https://api.daily.dev/og/posts/Xm2Yec5jG.png og:image:alt: "It was a pretty harrowing three months" – Undead Labs head Philip Holt on what happened after Xbox cut the studio loose og:image:width: 1200 og:image:height: 630 og:locale: en --- > ## Documentation Index > Fetch the complete documentation index at: https://daily.dev/llms.txt > Use this file to discover all available pages before exploring further. # "It was a pretty harrowing three months" – Undead Labs head Philip Holt on what happened after Xbox cut the studio loose **[GamesIndustry.biz](https://daily.dev/sources/gamesindustry)** · 15 min read · 0 upvotes · 0 comments ## Summary Undead Labs CEO Philip Holt describes a harrowing three months after Xbox announced it would divest the studio in July. The team feared unemployment and that State of Decay 3 would never ship. Microsoft first tried to find a buyer, then Undead Labs secured publishing money instead and became fully employee-owned, taking no outside investors. The studio cut its headcount below its prior level of just over 100 after layoffs in September. State of Decay 3 now has a 2027 release window, about 8,000 players testing it, and followed a creative pivot away from an MMO structure that set the studio back significantly and forced a full rewrite. ## Full article daily.dev links to this article rather than hosting it. Read it at the original source: ## Questions this post answers ### Why did Undead Labs become an employee-owned studio instead of being acquired after Xbox cut it loose? Microsoft initially tried to find an acquirer for Undead Labs, but outside investors mostly wanted a majority stake since the studio was pre-revenue. The team shifted to seeking publishing money instead, which combined with existing cash let them finish State of Decay 3 without taking any outside investors, resulting in a fully employee-owned Delaware C corporation structure. _Developers weighing studio independence versus investor control can follow stories like this on daily.dev._ ### Why has State of Decay 3 taken so long to release? Development restarted after a significant creative pivot away from an MMO vision that the studio's founder originally pursued, forcing the team to rewrite the entire game. CEO Philip Holt says the game people see today has really been built since late 2022 or 2023, while a 2020 trailer only reflected work from a small handful of developers at the time. _Track long, troubled game development stories like State of Decay 3's on daily.dev._ ### What is the new corporate structure of Undead Labs after leaving Microsoft? Undead Labs registered a new Delaware C corporation that acquired the original studio, then began issuing equity to all employees. CEO Philip Holt deliberately avoided majority ownership but created multiple stock classes with super voting rights so he retains voting control while leaving more shares available for broader employee equity distribution. _Follow how studios restructure around employee ownership and equity on daily.dev._ ## Similar posts on daily.dev - [The state of play after a truly torrid week for Xbox](https://daily.dev/posts/the-state-of-play-after-a-truly-torrid-week-for-xbox-cyibjbrdi) · Game Developer · 1 upvotes · 0 comments - [Report: Xbox considering sales or closures at Arkane and others](https://daily.dev/posts/report-xbox-considering-sales-or-closures-at-arkane-and-others-wf7vlnadr) · Game Developer · 1 upvotes · 0 comments --- Tags: [#game-development](https://daily.dev/tags/game-development), [#xbox](https://daily.dev/tags/xbox) [View this post on daily.dev](https://daily.dev/posts/it-was-a-pretty-harrowing-three-months-undead-labs-head-philip-holt-on-what-happened-after-xbox--xm2yec5jg) ```json {"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://daily.dev/#organization","name":"daily.dev","url":"https://daily.dev","logo":{"@type":"ImageObject","url":"https://daily.dev/apple-touch-icon.png","width":180,"height":180},"sameAs":["https://twitter.com/dailydotdev","https://github.com/dailydotdev","https://www.linkedin.com/company/daily-dev-ltd"]},{"@type":"WebSite","@id":"https://daily.dev/#website","url":"https://daily.dev","name":"daily.dev","publisher":{"@id":"https://daily.dev/#organization"},"potentialAction":{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https://daily.dev/search?q={search_term_string}"},"query-input":"required name=search_term_string"}}]} {"@context":"https://schema.org","@type":"TechArticle","headline":"\"It was a pretty harrowing three months\" – Undead Labs head Philip Holt on what happened after Xbox cut the studio loose","url":"https://daily.dev/posts/it-was-a-pretty-harrowing-three-months-undead-labs-head-philip-holt-on-what-happened-after-xbox--xm2yec5jg","mainEntityOfPage":{"@type":"WebPage","@id":"https://daily.dev/posts/it-was-a-pretty-harrowing-three-months-undead-labs-head-philip-holt-on-what-happened-after-xbox--xm2yec5jg"},"datePublished":"2026-10-26T13:34:49.927Z","dateModified":"2026-10-26T13:38:58.264Z","description":"Undead Labs CEO Philip Holt describes a harrowing three months after Xbox announced it would divest the studio in July. 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