They were later acquired by Activision in May 2002, and in 2005 Z-Axis relocated to Foster City, California. In early 2008, the studio was renamed to Underground Development in response to changes in both direction and personnel. On April 19, 2008, parent company Activision announced that the studio would close after completing development on the PlayStation 3 version of Enemy Territory: Quake Wars. However, the studio remained open and moved to a new office in the Redwood Shores area of Redwood City, California in February 2009.
Activision closed the studio on February 11, 2010 as part of a cost-cutting plan under Vivendi.