Compulsion Games goes independent in management buyout from Xbox
▼ Summary
– Compulsion Games completed a management buyout, separating from Xbox and regaining ownership of its original IP and publishing rights, with revenue from game sales now supporting the studio.
– The buyout followed Microsoft’s July divestment of five studios and layoffs of 3,200 people, making independence a preferable outcome to closure.
– CEO Guillaume Provost confirmed the deal, noting the team chose to stay together rather than split, and that Microsoft transferred the IP back last week.
– The studio owns titles like Contrast (2013), We Happy Few (2018), and South of Midnight (2025), with publishing rights still transitioning across platform stores.
– Provost is exploring funding options and partnerships, prioritizing a self-sustaining, profitable studio, and plans to take a slow, deliberate approach to growth.
Montreal-based developer Compulsion Games, known for titles like South of Midnight and We Happy Few, has officially regained its independence through a management buyout, severing ties with Xbox and Microsoft. The studio now owns its original intellectual property and publishing rights once again, a major shift that means direct game sales will fund the studio rather than its former corporate parent.
CEO Guillaume Provost confirmed the completed deal in an exclusive interview. The first public hint came last week when the Steam listing for South of Midnight updated to reflect Microsoft transferring the IP back to Compulsion. At that point, the studio stayed quiet, but Provost has now verified that management acquired both the studio and its staff. Future purchases of Compulsion titles will now directly support the independent team.
The move was widely anticipated after Microsoft announced in early July that it would divest five game studios and cut 3,200 jobs, half immediately and half over the following year. Compulsion, which specializes in stylized, narrative-driven atmospheric experiences, was among those five studios spun out.
“We’re confirming we’re getting all of our publishing rights back,” Provost said. However, he noted that legal processes take time, especially as the studio must also assume ownership of its games across Switch, PlayStation, and Xbox storefronts in addition to Steam.
Compulsion’s catalog spans a range of genres. Contrast (2013) was a puzzle-platformer with distinctive mechanics. We Happy Few (2018) delivered first-person survival horror exploration. The most recent release, South of Midnight (2025), is a third-person fantasy action adventure.
“I can confirm we have regained ownership of our IP, and that the publishing rights are transferring back to Compulsion. It’s just that there’s a transition period where that happens with different platform holders,” Provost explained. “Buying the games is supporting the studio as a result of that change.”
He added, “We’ve completed our separation process to become independent again.” While he declined to disclose financial terms, he confirmed the transaction was a management buyout, a far preferable outcome to a studio shutdown. “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,” Provost said.
The work ahead is substantial, but Provost is taking a measured approach. Only nine days have passed since the deal closed. He has been meeting with various parties to chart a stable course for the independent studio, exploring options for permanent funding while the team continues operations. Some staff are still working on a title that was in progress when Microsoft changed direction under new leadership.
Provost would not reveal exact headcount. Some employees left or started job hunting as soon as he warned them about the closure risk. Yet most studio leaders chose to remain, a decision he acknowledged with visible relief. “We’re getting a sense for what the management team is interested in doing and building,” he said.
His priorities include selecting projects that can make the studio self-sustaining while also offering inspiring work the team genuinely wants to create. He recognizes Compulsion will not have Microsoft’s resources, so he is engaged in extensive meetings, both internally and externally, gathering insights and exploring partnerships. “I just want to make sure that we’re setting the team up for success. We’re going to take things slow. We’re going to meet with everyone,” Provost said.
Immediate fundraising is not on the table. Provost wants the company to be in a strong position before seeking outside investment. He maintains a grounded sense of optimism about reclaiming control. “Everything is relative. Compared to all of us losing our jobs on July 6, this is a pretty good deal. I would say the exit was gracious on Microsoft’s part,” he noted.
Building a healthy business is the goal, and he expressed confidence in reaching that point if the team’s priorities align with running a profitable operation. He also wants employees to share in the company’s growth and is open to collaborations with other studios and IP holders, opportunities that were previously unavailable under corporate ownership.
“We’re excited to gain back the rights of our intellectual properties and to keep making interesting, weird stories and weird worlds,” he said.
Provost founded the studio in Montreal during the 2009 financial crisis and sold it to Microsoft eight years later. He sees parallels between then and now. “The moments like these are for change and opportunity. Starting ventures when times are tough means the companies start to build the right bones. They understand the need for being thrifty and lean because of the economic context. I think we’ll have really solid bones. This is a similar climate to when I started my studio originally.”
Already, he is enjoying the freedom to establish collaborations quickly, a flexibility that independence now affords him.
(Source: Gamesbeat.com)
