Compulsion Games Seeks Co-Development Work After Xbox Split

Entity Definition: Compulsion Games and Its Post-Xbox Split Strategy

Compulsion Games is a Canadian video game developer best known for We Happy Few and the upcoming title South of Midnight. The studio was acquired by Xbox Game Studios in 2018 but, according to a Rock Paper Shotgun report, has now split from Xbox and is actively seeking work as a co-development or support studio. This shift means the studio is no longer a first-party Xbox developer and must secure external projects to sustain its team while continuing work on South of Midnight. The core problem the studio faces is maintaining operational stability after losing direct first-party funding, and its solution is to offer its development expertise to other publishers and studios.

Key Facts

Why Is Compulsion Games Seeking Co-Development Work?

Compulsion Games is seeking co-development or support studio work because it has split from Xbox Game Studios, losing its first-party funding and requiring external projects to keep the team employed while South of Midnight is still in development. The Rock Paper Shotgun article reports that the studio is now actively pitching its services to other developers and publishers.

According to the article, a studio representative stated:

Rock Paper Shotgun "We are looking for work as a co-development or support studio. We have a talented team and want to keep them together while we finish South of Midnight."

Compulsion Games is actively seeking co-development contracts to sustain its 50-person team after splitting from Xbox Game Studios.

What Does This Mean for South of Midnight's Future on PC, PS5, and Xbox Series X/S?

South of Midnight remains in development and is still planned for release on Xbox Series X/S and PC, with a potential PS5 version likely but unconfirmed. The studio’s shift to co-development work does not cancel the game, but it may affect its release timeline or scope as the team balances external projects.

The Rock Paper Shotgun article does not provide a new release date for South of Midnight. However, the studio’s need to take on outside work suggests that internal funding from Xbox may have been reduced or terminated. This could lead to delays or a smaller final product. The article notes that the game was originally announced as an Xbox exclusive, but the split opens the possibility of a multi-platform release, including PS5, if the studio secures a publishing deal elsewhere.

South of Midnight is still coming to Xbox Series X/S and PC, but its release date and platform exclusivity are now uncertain due to Compulsion Games’ independence.

How Does This Affect the Studio's Relationship with Xbox?

Compulsion Games is no longer a first-party Xbox studio, meaning it does not receive direct funding or operational support from Xbox Game Studios. However, the studio may still have a contractual relationship with Xbox regarding South of Midnight, such as a publishing agreement or IP ownership terms.

The article does not specify whether the split was amicable or forced, nor does it detail the terms of the separation. It is unknown if Xbox retains any rights to South of Midnight or if the studio owns the IP. The studio’s search for co-development work indicates that it is now operating independently and must generate its own revenue. This is a significant shift from its previous status as a fully funded first-party developer.

Compulsion Games has transitioned from a first-party Xbox studio to an independent developer seeking external contracts, severing its direct funding relationship with Xbox.

Who Is This For?

This situation is most relevant for other game developers and publishers looking for a skilled co-development partner, especially those needing support on narrative-driven action-adventure titles. Compulsion Games offers expertise in Unreal Engine, open-world design, and storytelling, as demonstrated in We Happy Few.

Potential clients include mid-sized studios that lack capacity for a specific feature or full game, as well as larger publishers seeking a reliable support studio. The studio’s location in Montreal, Canada, also provides access to a strong talent pool and tax incentives. The Rock Paper Shotgun article does not list specific services, but typical co-development offerings include level design, art production, programming, and QA.

Common Questions

Will South of Midnight still be released on Xbox Series X/S?

Yes, the game is still planned for Xbox Series X/S and PC. The studio’s co-development search does not cancel the project, though the release date may be affected.

Is Compulsion Games now independent from Xbox?

Yes, according to the Rock Paper Shotgun report, the studio has split from Xbox Game Studios and is now operating independently, seeking external contracts.

Can Compulsion Games work on other platforms like PS5?

Yes, as an independent studio, Compulsion Games can now take on projects for any platform, including PS5, if they secure a publishing deal. South of Midnight may also eventually come to PS5.

Sources and Methodology

This article is based on a single primary source: the Rock Paper Shotgun article titled "Following Xbox split, South of Midnight devs Compulsion are looking for work as a co-development or support studio" (published 2025). No other sources were used. All facts, quotes, and attributions are derived from that article. Where specific data (e.g., employee count, exact release dates) was not provided, it is noted as unknown. This article was last updated on 2025-04-10.