Xbox Is Planning To Shutter Peabody-Award-Winning South Of Midnight Studio Compulsion Games

Microsoft’s Xbox division is preparing to shut down **Compulsion Games**, the developer behind the critically acclaimed *South of Midnight*, according to multiple reports. The move follows the game’s recent launch and comes amid broader layoffs at Xbox, though no official statement has been issued. Employees at Compulsion Games are reportedly being notified of the closure, with coverage suggesting the decision may be tied to Microsoft’s ongoing restructuring efforts in its gaming division.

The reports do not specify whether existing projects or sequels will continue under another developer or if Microsoft plans to acquire the game’s IP. Industry observers are questioning the timing, given the game’s strong reception and the studio’s recent achievements. Next steps hinge on Microsoft’s official confirmation and any potential impact on *South of Midnight*’s future, including multiplayer updates or standalone expansions.

Employee transitions, if any, remain unclear, though past Xbox closures suggest possible severance packages or reassignments. The broader gaming community may push for transparency on whether this reflects a pattern of prioritizing short-term cost-cutting over long-term studio investments.