Microsoft officially confirmed on August 20, 2026, that it is losing Compulsion Games. The studio, which recently developed the narrative RPG South of Midnight, is no longer part of the Microsoft organization.
Impact of Recent Layoffs
The separation follows a company-wide announcement regarding significant staffing reductions. Microsoft stated that it is proceeding with layoffs affecting thousands of employees, a decision that includes the closure or loss of several smaller studios within its portfolio.
Quick Facts
- Affected Studio: Compulsion Games
- Recent Title: South of Midnight
- Announcement Date: August 20, 2026
- Scope: Part of a broader layoff plan affecting thousands of Microsoft gaming employees.