Just days after regaining its independence from Microsoft amid widespread Xbox layoffs, Compulsion Games has announced its readiness to pursue new collaborative opportunities. The studio, known for titles such as South of Midnight and We Happy Few, is now actively seeking ways to "support the development of memorable projects" being created by other companies.
In a statement shared on LinkedIn, Compulsion Games expressed its intention to "expand opportunities to collaborate with studios across the games and entertainment industry." The studio highlighted its award-winning team and its experience in creating original intellectual property, citing South of Midnight's accolades, including a BAFTA Award and recognition on multiple "Best Games of 2025" lists. Compulsion Games stated its aim to bring its "artistry, technical expertise and collaborative approach" to new ventures, focusing on creating engaging experiences for players worldwide.
Following its split from Xbox, Compulsion Games confirmed it retains ownership of its existing titles: South of Midnight, We Happy Few, and Contrast. The studio's activities since the release of South of Midnight in 2025 remain undisclosed, but the approximately 112-person team was reportedly occupied. The current job market for independent studios presents a challenge, particularly in a cost-conscious industry, raising questions about which publishers might invest in new collaborations.
Compulsion Games' situation mirrors that of other studios affected by Xbox's restructuring. Double Fine, the developer of Psychonauts, also regained its independence. Arkane Studios, known for Dishonored and Deathloop, is reportedly in negotiations for a similar split. Ninja Theory and Undead Labs are also operating under new ownership arrangements.
These developments occur in the wake of significant workforce reductions at Microsoft's Xbox division, which have impacted approximately 1,600 employees immediately, with further layoffs expected. The cuts have affected various sectors within the Xbox division, including long-standing franchises.