Compulsion Games Has Successfully Separated Itself From Xbox, Retains All Rights To IPs

Compulsion Games has pulled off a management buyout and formally separated from Xbox, according to an exclusive report from GamesBeat.

The Buyout Is Officially Done

CEO Guillaume Provost confirmed the deal is complete in an interview with GamesBeat’s Dean Takahashi. Signs of the split first surfaced when the Steam listing for South of Midnight quietly changed ownership from Microsoft to Compulsion Games last week, though the studio declined to comment at the time.

Provost has now confirmed the studio bought back its intellectual property from Microsoft outright, along with the studio and staff themselves. “We’re confirming we’re getting all of our publishing rights back,” he said, though he noted the legal transition is still ongoing across platforms.

“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.”

That means Compulsion now needs to formally reclaim ownership of its games on Switch, PlayStation, and Xbox storefronts, in addition to Steam. Provost didn’t disclose the financial terms of the deal, only that it was structured as a management buyout, an outcome he called far preferable to the alternative.

“It is a far better outcome than the alternative, which was shutting down the studio,” Provost said, adding that keeping the team together was his priority going in. “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.”

Part Of Microsoft’s Broader July Restructuring

The split had been expected since early July, when Microsoft announced it was divesting five game studios and cutting 3,200 jobs, split roughly evenly between immediate layoffs and cuts planned over the following year. Compulsion Games, known for stylized, narrative-driven, atmospheric games, was one of the five studios spun out in that announcement.

The Montreal studio’s catalog spans Contrast, a 2013 puzzle-platformer, We Happy Few, a 2018 survival horror game, and South of Midnight, its most recent action-adventure release. Provost noted part of the team is continuing work on a project that was already in progress when Microsoft shifted direction under new leadership, referencing new Xbox CEO Asha Sharma.

Provost founded Compulsion Games in Montreal in 2009, during a previous financial downturn, and sold the studio to Microsoft eight years ago. He described the current split as a fair outcome given the circumstances. “Everything is relative,” he said.

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.”

Provost Is Taking It Slow On Purpose

Provost said the studio is taking a deliberately measured approach to its next steps, prioritizing team input and financial stability over rushing into new projects or funding rounds. “We’re getting a sense for what the management team is interested in doing and building,” he said, adding that he isn’t planning to immediately seek investment. “We’re going to take things slow. We’re going to meet with everyone.”

He said he’s already begun exploring collaborations with other studios and IP holders now that Compulsion can pursue those deals independently, framing the studio’s leaner, more constrained position as similar to the conditions he started the company under in 2009. “The moments like these are for change and opportunity,” Provost said.

Starting ventures when times are tough means the companies start to build the right bones.”

For a studio that came within weeks of potential closure, regaining full ownership of its games and staff represents a genuinely rare outcome among Microsoft’s recent divestments, one Provost seems intent on not taking for granted as Compulsion looks for its next project.