Compulsion Games is looking for co-dev work after Xbox spin-off

Compulsion Games – the Montreal studio behind South of Midnight and We Happy Few – posted on LinkedIn this week that it's actively seeking collaboration with other game studios. The BAFTA award-winning team is pitching itself as a co-development partner, inviting publishers and developers to "leverage the talent and creativity" of the studio.

The move comes days after Xbox announced a sweeping restructure that will cut 3,200 jobs across the company. As part of that shake-up, Compulsion and Double Fine were spun off as independent studios, while Ninja Theory and Undead Labs were handed to as-yet-unnamed new owners. Being spun off rather than shut down is the better outcome, but it's not a safety net – Compulsion now has to find its own funding and projects in one of the toughest markets in years.

The broader funding landscape makes that search genuinely difficult. Larger publishers are increasingly directing capital toward generative AI and stock buybacks rather than external development deals, and the deals that do exist tend to be structured so publishers recoup their full investment before developers see a penny of profit. Compulsion shipping South of Midnight to strong critical reception – including a BAFTA – gives the studio real credentials to sell, but credentials alone don't pay salaries.

A whole studio posting a "looking for work" notice on LinkedIn is an unusual sight, and it underlines just how precarious the post-Xbox situation is. Whether Compulsion lands a meaningful co-dev contract or eventually needs to seek acquisition remains to be seen.