Double Fine and Compulsion Thank Xbox as They Go Independent - News
by William D'Angelo , posted on 06 July 2026 / 2,235 Views
Xbox announced today it is divesting five of its studios, including Keeper and Kiln developer Double Fine Productions and South of Midnight developer Compulsion Games. Both studios are regaining their independence.
Both studios have posted a message thanking Xbox.
"Once again, Double Fine Productions will be an independent studio," reads the post from Double Fine. "We're thankful to everyone at Xbox for seven great years together, and for working with us to reach an outcome which preserves our history and culture, and returns ownership of our games to us.
"To everyone who has reached out to us these past few weeks: Thank you so much for all your kind words, we've been deeply touched by all your messages. We will share more news soon on what comes next. Your continued support is greatly appreciated, Tim & All at Double Fine."
Compulsion Games in its own post stated, "When Compulsion Games was founded in 2009 as an independent studio, we were just a few dreamers in a leaky old gramophone factory devoted to creating rich storylines and experiences that felt handcrafted. We care about the craft of making games, the stories we tell, the players who experience them, and the assembled creators who put their heart and soul into doing something different.
"Today, we're sharing that Compulsion Games will return to independent management following our time as part of XBOX. As part of this transition, we will retain the rights to Contrast, We Happy Few, and our award winning South of Midnight. We're grateful for the years we spent with XBOX, for the support they provided our team, and for the opportunity to bring these games to players around the world. As an independent studio, we're excited to continue building the distinctive games that define Compulsion while taking the next steps in our journey.
"Our immediate priority is to support our team throughout this transition period. We are confident in the future of Compulsion Games and look forward to this next chapter where one thing will remain constant: we will create unique games that tell important stories, all with the goal of touching the hearts and minds of our players."
Microsoft is helping fund these studios in order to help start development on their games while they look for additional financing. They will also retain all their IP and back catalogue.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can follow the author on Bluesky.
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Glad to see DF make it out of this ok!
Hopefully they can secure funding for future projects!
Would love to see another Brutal Legend, although I doubt that will ever happen
Which I think is, everything else considered, a pretty good deal in a shitty situation for them? I do not know how the legal situation was, but you would think Microsoft could have kept the IP rights. Even though they obviously have no interest in them (focusing on their big IPs first and foremost from now, they are not interested in making another Psychonauts), they could still have been di?!s about it I guess. Whether it is just to avoid bad press among gamers or a sincere "parting gift", at least DF and Compulsion have a fighting chance to make it on their own (when still having their IP), even though times are rough.
They dont need the IPs if Double Fine decide to make the game for them without the publishing and development costs, thats a W for MS in the financial department.
Honestly, I have a feeling both of these studios, moreso Compulsion, would've been closed by this point.
I think this might be good for them. Without the basically unlimited funds to arse around they are basically forced to focus on what they are great in, and that is good.
Good to see them being let go and not closed.
I mean, at least we got psychonauts 2 and south of midnight. I hope both studios find better success independently.
I'm glad these studios will get to split off instead of closing.
Good news! More of that please
I can easily see Compulsion Games flopping on their own.... maybe this lights a fire under their arses and they stop screwing around so much, and they manage to pull of a miracle. They atleast have a fighting chance. Double Fine can probably make it own their own.
They're better off without Xbox.
Are they? Studios getting closed left and right these days. Good chance they would've been closed by now. Double Fine was resorting to Kickstarter for funding prior to purchasing. They even said being bought by Xbox was how they were able to add even more to Psychonauts 2.
Compulsion will need to shop for publishers again. We Happy Few was published by Gearbox, but since they were acquired by Take-Two, don't know how they're handling publishing deals now.
Considering how Xbox butchered Rare Double Fine and Compulsion got out while they still could. As for their financial difficulties I don't know how they'll get over that hurdle.
Not every studios situation is the same. Rare was always going to be a shell of it's former self regardless of Xbox. At least they are still around and found success with Sea of Thieves.
But it's nothing like the Rare I grew up with. -_-
That was also 30+ years ago
Rare was dying even under Nintendo, why do you think Nintendo sold their shares
Lack of foresight.
Nintendo?
Why? XBOX kept them afloat during hard times
You forgot how poorly Grabbed by The Ghoulies and Perfect Dark Zero were received. Then there was Banjo-Kazooie Nuts and Bolts. -_-
I remember disliking DK64 and StarFox Adventures. Rare was having issues way before Xbox.
Thats coming from a guy who owns all Rare games across all platforms.
Glad to see they don't get terminated. Even if I wasn't the target audience for their games.
