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Compulsion Games becomes publisher of South of Midnight on Steam, suggesting departure from Xbox amid major restructuring is now complete
Compulsion Games is now listed as the publisher of South of Midnight on Steam, indicating that its separation from Xbox may be complete. The change matters because it supports reports that the studio has regained independence during a broader restructuring of Microsoft’s Xbox division, while retaining control of its own game franchises.
Compulsion and Double Fine were reported to have become independent, while Ninja Theory and Undead Labs also left Xbox under undisclosed ownership; Arkane Lyon’s position remains unclear. South of Midnight is still published by Microsoft/Xbox on PlayStation and Xbox stores, so it is uncertain whether those listings have simply not been updated; the game launched in spring 2025 to mixed reviews, praised for its visuals and music but criticised for shallow gameplay.
In short
- Steam listing suggests Compulsion Games has completed its Xbox departure.
- The studio retained ownership of South of Midnight and earlier franchises.
- Microsoft remains listed as publisher on console storefronts.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Studio independence represents a genuine positive for creative developers. Restoring control of creative decisions and intellectual property to the talented teams who built these games frees them from publisher constraints and allows for more authentic creative vision. This autonomy and IP ownership have concrete value—developers benefit from their creations' long-term success, can pursue designs based on merit rather than corporate mandates, and maintain agency over their artistic and commercial direction.
The case against
This restructuring raises serious questions about the studios' long-term viability and reflects underlying instability in Xbox's strategic direction. Independent studios lose access to the substantial infrastructure that major publishers provide—dedicated funding, sophisticated marketing campaigns, efficient distribution networks, and quality assurance resources. The widespread departures suggest discord within Xbox's strategy, and developers without securing alternative major backing may face considerably steeper challenges competing against well-resourced competitors.
Explained simply
Compulsion Games is a video game studio best known for We Happy Few and South of Midnight, an adventure set in a fantastical version of the American South. It was acquired by Microsoft in 2018 and became part of the company’s Xbox game studios.
Microsoft has been reorganising its Xbox division, and reports say some studios have left its ownership or become independent. The Steam listing naming Compulsion as publisher is one sign of a possible change, though its PlayStation and Xbox store listings still name Microsoft or Xbox.
Who owns a studio can affect who controls its games and future projects. The different store listings leave some uncertainty about Compulsion’s status and whether the change has been fully reflected across platforms.
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