In July 2026, Compulsion Games, a video game development studio known for titles like South of Midnight and We Happy Few, announced its search for new work opportunities shortly after regaining independence from Microsoft. This transition came as part of a larger wave of layoffs within Xbox, which affected several studios. Compulsion Games is now focusing on collaborating with other studios in the gaming and entertainment industry, indicating a shift from solely developing its own projects to supporting external development efforts. The studio has expressed a desire to leverage its award-winning team's talent and creativity to contribute to memorable projects elsewhere. The decision to seek collaboration opportunities reflects the challenges faced by independent studios in a competitive market. With the gaming industry experiencing cost-cutting measures and a cautious approach from publishers, Compulsion Games is navigating the realities of being an independent developer. The studio's announcement on LinkedIn highlights its commitment to returning to its roots and expanding its collaborative efforts, which may include pitching new projects to potential publishers for funding. Compulsion Games retains the brand rights to its previously developed titles, including South of Midnight, We Happy Few, and Contrast. However, the studio's future projects remain uncertain, as it has not disclosed what it has been working on since the release of South of Midnight in 2025. The approximately 112-person team may have been involved in supporting other Xbox studios or developing new concepts that could attract publisher interest. The broader context of this situation includes the recent independence of other Xbox studios, such as Double Fine, which is also exploring new projects. As the gaming industry evolves, the ability of studios like Compulsion Games to secure partnerships and funding will be crucial for their sustainability and growth in the coming years.