Bloomberg: Compulsion Games Reportedly in Talks with Microsoft After 'South of Midnight' Release

Reports from Bloomberg indicate multiple studios affiliated with Xbox are engaged in active negotiations with Microsoft about their future, with Compulsion Games specifically named in coverage.

Compulsion, the studio behind We Happy Few and a member of Xbox Game Studios since its acquisition, was cited in reporting as having released South of Midnight on the Switch 2 in March — a detail attributed to Bloomberg's sources.

Bloomberg's report lists Ninja Theory and Double Fine alongside Compulsion as parties involved in discussions with Microsoft.

Ninja Theory is widely known for the Hellblade series, and Hellblade: Senua's Sacrifice was released on the Nintendo Switch in 2019 and is available via the Nintendo eShop.

Double Fine is best known for Psychonauts and other narrative-driven projects.

The coverage does not present definitive outcomes, but it does collate multiple outlets' reporting about the state of these studios.

The Verge expanded on Bloomberg's coverage with reporting that some employees at Ninja Theory have been informed of possible closures and that studio leadership is exploring options to find buyers.

Kotaku has reported Compulsion's leadership is in negotiations with Microsoft, though the outlet said specific terms and next steps had not been disclosed.

Insider Gaming also reported that Arkane Studios is monitoring the situation closely amid concerns about its own future projects.

In summarizing Bloomberg's timeline and internal commentary, reporter Jason Schreier warned that the structure of Xbox could change rapidly: Schreier suggested the Xbox organization could look markedly different within a short period, indicating the situation may evolve over weeks rather than months.

For Nintendo-focused context, the references to Switch hardware and the Switch 2 underscore platform interest in third-party titles; Hellblade's 2019 Switch release remains a recent example of a high-profile studio bringing a flagship title to Nintendo's platform.

Microsoft and the involved studios have not released formal, consolidated statements detailing outcomes.

Readers should watch official channels — including Xbox announcements and company statements — for confirmed updates.

This developing story brings together reporting from Bloomberg, The Verge, Kotaku and Insider Gaming and highlights how platform strategy, studio management and major releases intersect across Xbox and Nintendo platforms.