Compulsion Games Secures Independence from Microsoft in Management Buyout

In a significant shift for the independent gaming landscape, Compulsion Games—the studio behind the acclaimed South of Midnight and We Happy Few—has successfully navigated a management buyout, severing its ties with Microsoft. The separation comes in the wake of the tech giant’s massive workforce reduction in July 2026, which saw 1,600 employees laid off and several studios shuttered, sparking widespread concern over the future of titles under the Xbox umbrella.

Reclaiming Intellectual Property

Following months of speculation regarding the publishing rights of its titles, Compulsion CEO Guillaume Provost confirmed the studio’s newfound independence in a statement to GamesBeat.

“I can confirm we have regained ownership of our IP, and that the publishing rights are transferring back to Compulsion,” Provost stated. He noted that while a transition period remains for navigating various platform holders, the core outcome is clear: “Buying the games is supporting the studio as a result of that change.”

The move effectively ends Microsoft’s financial stake in the studio’s portfolio. For consumers who have previously felt conflicted about purchasing games tied to the tech behemoth, this development offers a path to support the developers directly without contributing to Microsoft’s bottom line.

A Studio Stays Together

The decision to break away was driven by a commitment to the studio’s workforce. Amidst the industry-wide tumult that has seen numerous teams disbanded, Provost prioritized the cohesion of his team above all else.

“I did this deal for the team first and foremost,” Provost told GamesBeat. “I asked the team, ‘Do you want to stay together?’ The team told me we would rather eat rocks and drink gasoline rather than be split up.”

The Context of the Boycott

The news arrives at a time when Microsoft faces intense scrutiny from activists and players alike. Beyond the company’s aggressive layoffs and its controversial pivot toward generative AI, critics have increasingly targeted Microsoft for its technological partnerships that support the Israeli military’s operations in Gaza.

Major advocacy groups, including the Boycott, Divestment, Sanctions (BDS) movement and "No Games For Genocide," have called for sustained boycotts of Xbox and Microsoft products. While some had previously suggested that titles like South of Midnight were safe to purchase under the assumption they were insulated from Microsoft’s direct interests, the confirmation of the buyout provides a clean break, allowing the studio to operate free from the aftermath of Microsoft’s recent restructuring.

As Compulsion Games moves forward as an independent entity, the studio serves as a rare example of resilience in an era defined by consolidation and corporate instability. For fans of the developer’s work, the path to supporting South of Midnight is now one that keeps their resources firmly within the hands of the creators.