Breaking Free: Compulsion Games Ventures into Independence with ‘South of Midnight’

In recent news, Compulsion Games, a video game studio based in Montreal, has regained its independence and control over its intellectual property following Xbox’s layoffs in July.

Established as an independent studio in 2009, Compulsion Games was acquired by Xbox in 2018. Its most notable release under Xbox Games Studio was the 2025 action/adventure game, “South of Midnight,” set in a mystical Deep South setting.

During the initial wave of layoffs announced by Microsoft affecting its Xbox division, Compulsion Games was among the five studios marked for spin-out or closure. The other studios impacted included Double Fine Productions, Ninja Theory, Undead Labs, and Arkane Studios.

In a recent interview with GamesBeat’s Dean Takahashi, Compulsion CEO Guillaume Provost disclosed that the studio had successfully repurchased itself, along with its team and the “South of Midnight” intellectual property, on August 11.

Although “South of Midnight” remains accessible through platforms like Steam and PlayStation Network, Compulsion now self-publishes the game.

Provost confirmed that no layoffs occurred during the transition to independence, with the majority of the team opting to remain with the studio.

Updates on the other studios affected by the July layoffs include:

• Double Fine Productions downsized by laying off 23 employees to ensure sustainability. The San Francisco-based studio has regained full independence and ownership of titles like “Psychonauts,” and will participate in the Penny Arcade Expo in Seattle.
• Ninja Theory, based in Cambridge, England, has reportedly been spun off from Microsoft and will continue work on “Senua,” part of the “Hellblade” series, under new ownership.
• Undead Labs, located in Seattle, is under new ownership but remains committed to releasing the third installment of its zombie survival series, “State of Decay,” in the upcoming year.
• The status of Arkane Studios, with offices in Austin, Texas, and Lyon, France, remains uncertain. The closure of its Austin office prompted former employees, including studio head Harvey Smith, to establish a new company, Black Pony Immersive, focused on developing games in the “immersive sim” genre akin to “Dishonored.”

Xbox’s presence is notable at the ongoing Gamescom conference in Cologne, Germany.