Microsoft owns the IP for Class4, following a deal that funded and developed State of Decay, Weathers said: "We cannot begin working on Class4 without a greenlight from Microsoft ... and a mutually agreeable contract." Undead is still talking with Microsoft about the specifics of Class4.
State of Decay was originally called Class3, and Undead viewed it as the first step toward that larger MMO project, Undead founder Jeff Strain told us in 2011. "The minute-by-minute core of the game will all be there in Class3," Strain said. "The only thing it won't have is the massive player participation the sequel will have."
Today, Weathers explained the negotiations with Microsoft regarding Class4. "We have to agree on where we think the technology is going to be in a few years (since the game will take a few years to develop); we have to agree that we have the same goals; and we have to agree on how we'll collectively run and support the final game," Weathers said.
State of Decay is doing well – since its launch on June 5, it's been crowned the fastest-selling original game on Xbox Live Arcade, ever, with 500,000 sales. We found State of Decay's premise and vibe to be tense (in a mostly good way), but we ran into some technical issues that Undead is currently having problems patching.