In a shocking turn of events, gaming enthusiasts are left on edge as Microsoft's highly anticipated zombie survival game, State of Decay 3, and its developer, Undead Labs, reportedly face the threat of closure. Sources close to the situation have revealed that Microsoft is currently seeking a buyer for Undead Labs, based in Seattle, Washington, with potential cancellation looming if no deal can be struck. This news follows recent reports of impending layoffs at Xbox and comes on the heels of Microsoft's Xbox Games Showcase earlier this month, where State of Decay 3 was unveiled alongside a release window for 2027 and confirmation of a PlayStation 5 version. As the gaming world anxiously awaits more information, it seems that hundreds of jobs are at stake not just at Undead Labs but across Microsoft's gaming business, which includes studios like Bethesda and Activision Blizzard. The potential closure of Undead Labs is part of a larger restructuring effort by Microsoft, as the company grapples with declining revenue and a 3% accountability margin, down year-on-year. Other studios reportedly fighting to avoid closure include Psychonauts developer Double Fine, South of Midnight developer Compulsion, and Hellblade developer Ninja Theory, who are said to be in talks with Microsoft over potentially buying themselves out. In the midst of this uncertainty, unionized Xbox workers have called for immediate bargaining following the layoff reports, voicing their concerns and demanding change.