Compulsion Games leaves Xbox and reclaims all its licenses

Compulsion Games is no longer owned by Microsoft. The Montreal studio behind South of Midnight has completed a buyout by its leadership team and is independent once again, with its licenses in tow.

Guillaume Provost, CEO and founder of the studio, confirmed the deal to GamesBeat on August 20, 2026. The arrangement is a management buyout: leadership bought back the studio, its staff, and its intellectual property. "I can confirm that we've regained ownership of our licenses, and that publishing rights revert to Compulsion," he states, while the transition takes place with each platform holder. The agreement was signed on August 11, 2026. Financial terms were not disclosed.

Contrast, We Happy Few, and South of Midnight return to the studio

All three games in the catalog are affected: Contrast (2013), We Happy Few (2018), and South of Midnight (2025). Buying one now funds Compulsion, not Microsoft. On Steam, the South of Midnight page no longer lists Xbox Game Studios as publisher, but Compulsion Games.

The counter-example to a bleak year at Xbox

On June 25, 2026, we reported here on a studio thought to be at risk of closure. In early July, Microsoft announced 3,200 job cuts and its withdrawal from five studios, including Compulsion. Provost recounts asking his team whether they wanted to stay together: "The team told me they'd rather eat rocks and drink gasoline than be split up." Coming out alive from such a reorganization remains the exception: Xbox had shut down Arkane Austin and Tango Gameworks in 2024.

Nothing new has been announced: part of the team is continuing a project started before Microsoft's reversal, and Provost is seeking sustainable funding before opening the next chapter.