Days after leaving Xbox, South of Midnight developer Compulsion Games broadcasts that it's looking for work

Days after Compulsion Games bought back its independence from Microsoft as part of Xbox's mass layoffs, the studio is already seeking new work opportunities. The South of Midnight and We Happy Few developer announced it is now open to "opportunities to collaborate" and looking to "support the development of memorable projects" being made elsewhere, suggesting it may not be developing its own game. The studio wrote on LinkedIn that it is expanding opportunities to collaborate with studios across the games and entertainment industry, leveraging the talent behind South of Midnight, which won a BAFTA Award and seven Canadian Game Awards. As part of its split from Xbox, Compulsion Games retained the brand rights to its created games: South of Midnight, We Happy Few, and Contrast. The approximately 112-person team's activities since 2025's South of Midnight are unknown, as that game had no add-ons or expansions. The other Xbox studio to regain its independence last week was Double Fine, developer of Psychonauts, which also retains ownership of its franchises. Meanwhile, Arkane is negotiating a split from Xbox, and Ninja Theory and Undead Labs are under undisclosed new ownership. Microsoft's Xbox cuts have resulted in 1,600 immediate layoffs, with a further 1,600 to occur by next summer.