State of Decay 3 was announced one year ago at the Xbox Games Showcase event. Since then, not much has been known about the game made by Undead Labs, which seems to be carrying the survival genre with an open world. Fortunately, recent information hunger has been somewhat satisfied after job postings hinted at what game engine Undead Labs used to build State of Decay 3.
The job vacancy is listed on the BambooHR website where specifically, it is looking for a Sound Designer who will join the State of Decay 3 development team in Seattle, Washington. One of the sentences in the job description mentions the implementation of audio through “Blueprints (UE5)”. UE5 here refers to Unreal Engine 5 – the game engine from Epic Games which is also used in several other big games such as Senua's Saga: Hellblade II and BioShock 4.
Apart from the not so significant upgrade from Unreal Engine 4 to Unreal Engine 5, it doesn't mean that State of Decay 3 can't appear more immersive than other games or their predecessors. Moreover, the Unreal Engine 5 demo that was exhibited by The Coalition some time ago looks charming and it runs on Xbox Series X which incidentally is the main console for State of Decay 3.
For the rest, nothing is known about State of Decay 3 other than the fact that it will launch for Xbox Series X/S as well as PC.