Compulsion Games buys itself back from Xbox, reclaiming We Happy Few and South of Midnight
What's the deal? Compulsion GamesDealroom has a profile for this one. Try Dealroom → has completed a management buyout from XboxDealroom has a profile for this one. Try Dealroom →, returning the Montreal studio to independence with full ownership of its intellectual property. Chief executive Guillaume Provost confirmed the deal, which closed on August 11, 2026, in an interview with GamesBeat. Provost declined to disclose the terms.
What it covers: The buyout moves three things back to Compulsion — the studio and its staff, the IP behind its three released games, and the publishing rights across storefronts. That catalog spans Contrast, We Happy Few, and South of Midnight. Any sale of a Compulsion title now flows to the studio rather than Microsoft.
Why now? Compulsion was one of five studios caught in a restructuring Xbox chief executive Asha Sharma announced on July 6, 2026, which paired 3,200 job cuts with the divestment of five development studios. Sharma said Xbox had concluded it was "not the best home for every type of studio" after the business failed to grow as expected following years of acquisitions.
The unwind: The deal reverses Microsoft's 2018 acquisition. Compulsion was founded in Montreal in May 2009 and built Contrast as a seven-person team before Microsoft bought it in 2018, when it employed 38 developers. Its lone release under Xbox ownership, South of Midnight, launched on April 8, 2025.
Where the others landed: Compulsion and Double FineDealroom has a profile for this one. Try Dealroom → were allowed to return to independence with their IP and catalogs. Ninja Theory and Undead LabsDealroom has a profile for this one. Try Dealroom → were sold to unnamed buyers, and ArkaneDealroom has a profile for this one. Try Dealroom → entered negotiations to leave.
What's next? Part of the team is working on a title that was already in development when the divestment began, and Provost said the studio is holding talks about partnerships with other studios and IP holders. He is exploring permanent funding but does not plan to raise money immediately, wanting the company in a strong position first. His target is a self-sustaining, profitable studio whose team shares in the growth.
What Provost says: He framed the buyout as a bid to keep the team together. "I did this deal for the team first and foremost. 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," he said.
The signal: Microsoft's retreat from its acquisition spree is handing studios a rare path back to independence rather than to the scrapheap. Provost acknowledged Compulsion will lack the resources it had inside Microsoft, but measured the outcome against the alternative: "Compared to all of us losing our jobs on July 6, this is a pretty good deal."
Read more: Gaming.net
Image credit: Generated with Gemini
