South of Midnight Maker Said to Be Shuttered by Xbox

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As of Monday, June 15th, 2026, at 6:30 PM, this story is still unfolding. Kotaku has recently updated their article with the following information:

People at the studio say Compulsion Games is talking with Microsoft about its future, but they haven’t revealed what those discussions involve.

The talks might lead to the studio becoming independent again, but we’ll have to see what happens next for confirmation.

There’s been a lot of talk this weekend about possible studio closures at Xbox, as new leaders try to sort out some difficult problems.

Social media has been filled with worrying rumors about layoffs, and Kotaku now reports that Compulsion Games, the studio behind South of Midnight, is likely to be one of the first affected.

It’s unclear how many jobs have been lost, but LinkedIn shows around 90 people were employed at the studio, which is based in Montreal. Microsoft bought the studio in 2018, just before the game We Happy Few came out.

Several people who work at the studio, including writer Zaire Lanier from the game South of Midnight, have posted on social media saying they are seeking new jobs. However, the studio hasn’t made any official statement about this as of today.

Xbox Game Studios head Craig Duncan has stepped down from his position after just under two years, according to reports from The Game Business. Louise O’Connor, who served as Chief of Staff, has also departed the company.

This weekend, Microsoft CEO Satya Nadella stated that Xbox needs to be self-sufficient after being supported by company funds for 25 years. He also pointed out that Xbox games are actually earning more money through views and content on YouTube than they are directly through Microsoft.

South of Midnight has received several accolades, including the Games for Impact award at The Game Awards last year. It came out on PlayStation 5 earlier in 2024, and we called it a remarkably beautiful yet straightforward game.

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2026-06-15 20:39