South of Midnight developer Compulsion Games seeks new partners after leaving Xbox

Compulsion Games is looking for new development and publishing partners after becoming independent from Microsoft as part of a major restructuring across Xbox.

The studio, known for Contrast, We Happy Few, and South of Midnight, has opened the door to collaborations across the games and entertainment industries. Its announcement suggests that the team is prepared to work on its own projects while also supporting games led by other developers or publishers.

This approach could help Compulsion Games secure stable work as it begins operating outside the Xbox organization. Rather than immediately announcing another large original title, the studio appears willing to contribute its creative, artistic, and technical experience to a wider range of projects.

Compulsion Games spent eight years under Microsoft. During that period, it developed South of Midnight, an action adventure game that launched in 2025 and received several industry awards and nominations.

Compulsion Games may take on support development while planning its future

The studio has highlighted its experience in creating original properties, building distinctive worlds, and working with external partners. Its public message focuses on collaboration, which indicates that support development could become an important part of its near term strategy.

Support studios can contribute to animation, art, engineering, level design, performance optimization, and other parts of production. This type of work could allow Compulsion Games to maintain its team and generate revenue while deciding what it wants to develop independently.

The studio has not announced a new game, publisher, or formal partnership. It also has not confirmed whether its next project will continue one of its existing properties or introduce a new setting.

One important part of the separation is that Compulsion Games retained the rights to its existing properties. The studio continues to control Contrast, We Happy Few, and South of Midnight, giving it more freedom when considering sequels, licensing agreements, or partnerships.

Keeping those rights may make the company more attractive to potential investors and publishers. South of Midnight is still a relatively recent property, while We Happy Few has an established audience and a recognizable visual identity.

Xbox restructuring created several independent studios

Compulsion Games left Microsoft during a broader reorganization that affected thousands of Xbox employees and several development teams. Some studios were separated into independent companies, while others were sold.

Double Fine, the developer behind Psychonauts, also became independent as part of the changes. Its future plans have not yet been detailed.

The restructuring also included staff reductions across multiple Xbox teams and changes to the handling of major franchises. These moves form part of a wider attempt to reduce costs and reorganize Microsoft’s gaming operations.

For Compulsion Games, independence brings more control but also greater financial responsibility. The studio must now secure funding, contracts, and distribution arrangements without relying on Microsoft’s internal resources.

Its willingness to collaborate suggests a cautious and practical start. Support work could provide financial stability, while ownership of its existing games gives the team several options for future development.

Compulsion Games has not confirmed when it expects to announce its first project as an independent studio. For now, its focus appears to be finding partners that can make use of the team’s creative and technical skills.