Compulsion Games, the studio behind South of Midnight, has begun seeking collaboration opportunities with other entertainment companies after regaining its independence following Xbox’s latest round of layoffs. The move matters because it shows how affected studios are trying to secure new work and funding quickly after Microsoft’s cuts, while also highlighting the wider upheaval across Xbox’s first-party development network.

In a LinkedIn statement, the Montreal-based developer said it was opening itself to partnerships and emphasised the award-winning pedigree of South of Midnight, which it said had earned a BAFTA, a Peabody and seven Canadian Game Awards. The game launched on Switch 2 in March and reportedly passed one million players within a month, although no official sales figures have been released and Game Pass likely boosted reach. The article adds that other Xbox-linked studios are also changing status, with Double Fine becoming independent again, Ninja Theory and Undead Labs moving towards new ownership, Arkane reviewing options, and Xbox reportedly planning to cut about 3,200 jobs in FY27 after an initial 1,600 role eliminations.