Xbox Officially Loses Compulsion Games

South Of Midnight Developer Officially No Longer Owned By Xbox Published Aug 20, 2026, 2:09 PM EDT Steven is a seasoned writer specializing in the video game and technological fields, with years of experience creating reviews, features, and industry analysis. Passionate about the gaming world and its evolving culture, Steven has always wanted to combine his enjoyment of writing and love for gaming in a way that can provide insightful coverage for players and enthusiasts alike. Sign in to your TheGamer account After developing the award-winning narrative RPG South of Midnight, Microsoft announced its plans to lay off several smaller studios and go forward with layoffs for thousands of employees immediately, or in the next year. Although Compulsion Games was originally going to be dropped by Microsoft, the developers have left on their own terms to start a new studio, as reported in an exclusive interview with GamesBeat, which was spotted by Reddit user gorotheninja. Although the studio was already planning their exodus ever since this year's Game Awards, the management buyout has finally been solidified, leaving Compulsion Games studio entirely independent with full rights to their own intellectual properties, like South of Midnight. What The Management Buyout Means For Compulsion Games With the buyout coming after a wave of Xbox layoffs that had previously affected the studio, Compulsion Games' full ownership of their own properties that were developed under Microsoft means that the profits from all future purchases of Compulsion Games titles "goes to supporting the studio, not Microsoft," as noted by its CEO Guillaume Provost. Although the official announcement has been a long time coming, there was already some speculation that the deal had finally gone through, considering South of Midnight's Steam page changed its publisher status to Compulsion Games rather than Microsoft, as mentioned in the report. In terms of what is next for the studio, the team at Compulsion Games has also previously announced that they are open to supporting work as opposed to solely funding and developing their own original projects, opening the door to becoming artistic partners on larger projects that can help fund their activities. While we don't have exact details about what the terms of the buyout were or when we can expect to see a glimpse at the next project by Compulsion Games, the CEO has reportedly already been having talks with other studios to ensure the development team can stay afloat as an independent studio once again. While the South of Midnight team is still smaller than it used to be after several developers had been previously laid off or left ahead of the closure date, the Provost is still optimistic about the change that he describes as a "pretty good deal" when "compared to all of us losing our jobs on July 6." Released April 8, 2025 ESRB M For Mature 17+ // Blood, Strong Language, Violence Developer(s) Compulsion Games Publisher(s) Xbox Game Studios Engine Unreal Engine 5 Genre(s) Action, Adventure