Compulsion Games Secures Independence in Successful Management Buyout from Xbox
In a major shift for the Montreal-based development scene, Compulsion Games has officially completed a management buyout, effectively separating the studio from Microsoft’s Xbox division.
The move, confirmed in an exclusive interview with GamesBeat, marks a return to independence for the studio behind atmospheric titles such as South of Midnight, We Happy Few, and Contrast. Speculation regarding the split began circulating last week when ownership of the studio’s Steam catalog transitioned from Microsoft back to Compulsion Games.
Saving the Team
The buyout arrives in the wake of Microsoft’s announcement in early July, where the tech giant revealed plans to divest from five of its gaming studios, resulting in a workforce reduction of 3,200 employees across its gaming operations. For Compulsion Games, the buyout offered a lifeline that avoided the total closure of the studio.
"I did this deal for the team first and foremost," CEO Guillaume Provost said. "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."
Under the terms of the agreement, the studio’s management has acquired the company and its staff, along with the rights to its original intellectual property. This transition ensures that future revenue from the studio’s library—which covers various digital storefronts including Steam, PlayStation, and the Nintendo Switch—will directly support the studio’s ongoing operations rather than funneling into Microsoft.
A Measured Path Forward
While the deal was finalized just over a week ago, Provost emphasized that the company is taking a cautious, step-by-step approach to its new chapter. The leadership team is currently focused on stabilizing the studio’s foundations, which includes exploring new, permanent funding models and potential partnerships.
"We’re getting a sense for what the management team is interested in doing and building," Provost explained, noting that the studio is committed to crafting the "interesting, weird stories and weird worlds" that have become its hallmark.
While the studio will no longer have the vast resources of a parent company like Microsoft, Provost views the independence as a return to the studio’s roots. He founded Compulsion Games in 2009—coincidentally during a major economic downturn—and believes the current climate will help the studio build "solid bones" by encouraging efficiency and lean operations.
Looking Ahead
Despite some staff turnover following the initial announcement of potential closures, the core leadership team remains intact. Provost is now focused on aligning the team’s creative passion with a sustainable, profitable business model.
"I’m fairly confident we can get to that place if the team’s heart and priorities are aligned with running a profitable business," Provost said.
While he declined to disclose the specific financial terms of the buyout, Provost described Microsoft’s handling of the exit as "gracious." As the studio settles into its newfound independence, it is already exploring new collaborations, signaling a return to the agility the team possessed before being acquired by Microsoft eight years ago.
For now, the focus remains on the work at hand—continuing development on projects in progress and ensuring the team is positioned for long-term creative success.
