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Eight years after acquiring it, Microsoft is reportedly closing We Happy Few and South of Midnight developer Compulsion Games.
Kotaku reports that Compulsion, estimated at over 90 employees, is the latest part of Microsoft's downsizing, which has seen thousands laid off in the past few years and will reportedly see deeper layoffs hit Xbox in July.
Compulsion Games senior writer Zaire Lanier posted online about "looking for work" hours before Kotaku's report was published, and has since shared the report as well as posts mourning the studio.
This comes on the heels of Xbox Game Studios head Craig Duncan departing the company. It's been a bad month for the company overall despite some eye-catching Summer Game Fest reveals: Microsoft CEO Satya Nadella recently said Xbox is still trying to become "a sustainable business", while new Xbox CEO Asha Sharma and CCO Matt Booty jointly expressed that a "reset" is necessary amid declining margins and mounting overextension.
Booty, per a Game File interview earlier this year, positioned Compulsion as exactly the type of studio that Xbox wants to cultivate, noting its award wins.
"I mean, we run a portfolio and our portfolio includes some of the biggest franchises on the planet – Call of Duty and Minecraft – but we're also dedicated to places where new [intellectual property] can come to life and where these stories can be told, you know, in our studios like Compulsion and Double Fine that got some nominations for Keeper," Booty said. (Call of Duty and Minecraft were, of course, not made by Microsoft but acquired by it.)
I've reached out to Microsoft for comment on Compulsion Games.
South of Midnight, a southern-themed action platformer and Compulsion's third game, earned strong reviews on Steam and all consoles (PS5 and Switch 2 versions arrived this year), won Peabody and BAFTA awards, and drew glowing praise from Sharma and Booty just this year. Our South of Midnight review called it a spellbinding tale somewhat let down by predictable gameplay.
South of Midnight is also the only game Compulsion has released since Microsoft acquired the studio in 2018. That acquisition followed the release of We Happy Few, a retrofuturist thriller which got somewhat less critical praise.
Compulsion will seemingly join a growing line of studios acquired and shuttered by Microsoft. The upcoming Fable encapsulates the company's history with games. It's the latest in a series started by Lionhead Studios, which Microsoft bought and then closed, now overseen by Forza developer Playground Games. Lionhead's closure was long held up by Xbox executives as a mistake to avoid repeating.
Microsoft considered cutting Xbox off entirely and making it easier to sell, report says.
