State of Decay 3 Studio Almost Sold to Splash Damage

What Is Undead Labs?

Undead Labs is a video game development studio known for creating the State of Decay series. The studio operates as a first-party developer under Xbox, producing open-world zombie survival games. Its primary role is developing exclusive titles for Microsoft's gaming ecosystem, including the upcoming State of Decay 3.

According to a Kotaku report, Undead Labs was nearly sold to Splash Damage, the company behind Brink, before the deal fell through. The acquisition attempt had the financial backing of the publisher behind an upcoming Star Wars game. The failed sale ultimately kept the studio under Xbox ownership, preserving its position within Microsoft's first-party development network.

Key Facts

Why Did the State of Decay Studio Stay with Xbox?

The sale of Undead Labs to Splash Damage fell through, leaving the studio under Xbox ownership. The failed transaction was backed by the publisher of an upcoming Star Wars game, though the specific financial details of the proposed acquisition remain unknown.

The Kotaku report indicates that Splash Damage, the company behind Brink, was positioned to acquire the studio. The deal did not materialize, and no official reasoning for the collapse was provided in the source material. As a result, Undead Labs continues to operate as part of Xbox's first-party lineup, with State of Decay 3 remaining under Microsoft's umbrella.

The proposed acquisition of Undead Labs by Splash Damage did not close, keeping the State of Decay studio within the Xbox first-party portfolio.

Who Was Involved in the Undead Labs Acquisition Attempt?

Undead Labs, the developer behind the State of Decay series, was the target of an acquisition attempt by Splash Damage, the studio known for developing Brink. The financial backing for this purchase came from the publisher responsible for an upcoming Star Wars game.

All three parties in the transaction are identifiable from the source material: Undead Labs as the target, Splash Damage as the prospective buyer, and an unnamed publisher with a Star Wars title in development as the financial backer. The identity of the Star Wars publisher and the specific Star Wars game are not disclosed in the source.

"State of Decay 3 Studio Almost Sold to Splash Damage" — Kotaku headline

How Does This Compare to Other Studio Acquisitions?

This failed sale differs from typical studio acquisitions because it did not result in a change of ownership. Most acquisitions in the gaming industry conclude with the transfer of intellectual property and personnel, but in this case, the deal fell through, and Xbox retained its development studio.

The involvement of a publisher backing an upcoming Star Wars game suggests a potential competitive dynamic in the acquisition market. However, detailed comparison data regarding other deals is not provided in the source material, so specific comparative metrics are unknown.

In an atypical industry transaction, the Undead Labs sale collapsed, and the studio did not change ownership, remaining with Xbox.

Common Questions

What happened to the Undead Labs sale to Splash Damage?

The sale fell through. Splash Damage, with financial backing from the publisher behind an upcoming Star Wars game, was unable to complete the acquisition of Undead Labs. The studio consequently remains under Xbox ownership.

Did Undead Labs stay with Xbox after the failed sale?

Yes, Undead Labs stayed with Xbox. Because the deal did not close, the studio continued operations as part of the Xbox first-party portfolio, with the upcoming State of Decay 3 remaining an Xbox title.

Who was backing the Splash Damage purchase of Undead Labs?

The financial backing came from the publisher behind an upcoming Star Wars game. The source material does not name the specific publisher or the particular Star Wars title in question, leaving those details unknown.

Sources and Methodology

This article is based on a single primary source: a Kotaku report titled "State of Decay 3 Studio Almost Sold to Splash Damage." The source URL is https://kotaku.com/state-of-decay-3-studio-almost-sold-to-splash-damage-before-the-deal-fell-through-2000736948. No additional external sources were referenced in the source material. All facts, entity names, and statements are drawn exclusively from the provided text. Any details not stated in the source—including deal valuation, timeline, and specific parties' identities beyond those named—are unknown and have not been fabricated.

This article was last updated on May 27, 2025.