Double Fine and Compulsion to keep game rights as Xbox spins off studios
Xbox CEO Asha Sharma said the two studios will retain their IP and catalogs as Microsoft separates four Xbox game teams.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Microsoft is spinning off four Xbox game studios, and two of them are set to leave with their intellectual property and back catalogs intact. Xbox CEO Asha Sharma said in a memo reported by The Verge that Compulsion Games and Double Fine Productions will return to independent management with ownership of their franchises and enough runway for their next games.
The move is part of a broader Xbox restructuring announced by Microsoft, according to The Verge. The four studios being separated from Xbox are Compulsion Games, Double Fine Productions, Ninja Theory and Undead Labs.
Sharma said in the memo that Compulsion and Double Fine will transition to independent studios with their IP, catalog and support for upcoming work, according to The Verge. That detail matters because studio sales and spinouts can leave ownership of older games or future sequels with the former parent company.
Compulsion confirmed the shift in a statement posted to Bluesky. The studio said it will keep the rights to Contrast, We Happy Few and South of Midnight as it returns to independent management after its time under Xbox.
The Montreal studio said it was founded in 2009 as an independent developer and described its focus as story-driven, hand-crafted games. Compulsion also said its first priority is supporting its staff during the transition, while continuing to make games with a distinct narrative identity.
Double Fine also said it will become independent again. In a statement on its website, the studio thanked Xbox for seven years together and said the agreement returns ownership of its games while preserving the studio’s history and culture.
Double Fine, known for games including Psychonauts, Keeper and Kiln, said it will share more information later about what comes next. The statement was signed by Tim and the Double Fine team.
The other two studios are taking a different path, according to Sharma’s memo as reported by The Verge. Ninja Theory and Undead Labs have entered terms to join new ownership, with funding tied to completing and expanding their next announced projects.
Those projects are Senua from Ninja Theory and State of Decay 3 from Undead Labs, Sharma said. The memo did not identify the new owners in the details reported by The Verge.
Sharma also addressed Arkane Studios, which is working on a Blade game. According to the memo, Arkane management is starting required consultation with its Works Council to review possible strategic options.
The studio changes mark another major adjustment for Xbox’s first-party game operation. For Double Fine and Compulsion, the separation comes with a key concession: they are leaving with the games and brands that define their histories.
This story draws on original reporting from The Verge.