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

> **Open Intelligence Dossier** · First detected: 2026-06-15 17:07 UTC · Category: Technology

## Executive Summary
Microsoft’s closure of Peabody-winning studio Compulsion Games stirs backlash amid Xbox’s restructuring

## Intelligence Brief
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.

## Multi-Source Evidence Table
| Source Outlet | Headline | Verification URL |
|---|---|---|
| The Guardian | Fears for Xbox as it puts its developers on the chopping block once again | [Source Link](https://news.google.com/rss/articles/CBMikAFBVV95cUxQTjNHdjh1a3JnSng5SjdzQ3VDekJoR0dic2F3RkpzMWV1cW10TVdTbFhjSUZHeTFMODM1NUxPZC1NN19INS1ZZER2NlRfRDBkNjlzay1sREUtZnZ1RFVONmtoQUozNjd3UkRkZFU1ZHZNb0xYRF9PN1lBaHRuWkgzZFY5OWQ1VWxlQWtyWVNzdk0?oc=5) |
| 80 Level | Xbox Is Reportedly Planning to Shut Down South of Midnight & Hellblade Studios | [Source Link](https://news.google.com/rss/articles/CBMioAFBVV95cUxPTGttZjFGMEMycDlVZ1RNZTFWTF9pRmp3UXJLd2ZmU2JhSjg2b19OajMtMW85NXUxMGx4Vk52dHVqQ000QXNJZVhmbWJmY2I3S00xUmZOX19TWEhWZURPd19tNm1ZMUdPMG9IUEQ0eXpiWU9LQUlRZkFQNDdNRS1OVUt6ck5YMjlOY0xQOXpqWVRadTBZV3hpWmNfZHdzNElT?oc=5) |
| Polygon.com | Microsoft should sell Xbox before it ruins everything | [Source Link](https://news.google.com/rss/articles/CBMijAFBVV95cUxNMFF2blpraDAwWGZXRHZwTzVpOUhNYkU1OWpuVzR2SXkxZHgzYVdVVTNMWVY1eWJ5OGYtYUpzSGcyMWpvcUlQd3A4Z1g3N1AydTlidHdZUGd5US1DSFlWUGs3dnFpMDR5cHdBTHVtUmpTZzN1TVNBNTRhdHdORUQ4UnBzd2JoNVFvdmc2LQ?oc=5) |
| Forbes | Here Are The Studios Reportedly On Xbox’s Chopping Block | [Source Link](https://news.google.com/rss/articles/CBMiqgFBVV95cUxNMFlhbjdBeVYwV1Rab1lFNWVsM3I4ZUhURVRpNnBQYVJjYmdXRjd5ZG56d2hBLXNzRmFnZlZQZllpMDloMVNXX3Z5U0cxRm1TcFF4S1lPRUVqVXpDWGhlbUhOZVRlMUJsWHV5TFhpU0xCVFcxY3lPblIzRXBkOVlZc01sc2FlZ180TGJLc2F5WEVlYUw4RzVwX0tBdjJYb1A5MVhQWHkwZUJkZw?oc=5) |
| IGN | Psychonauts Developer Double Fine Responds to Closure Reports With a Single Emoji | [Source Link](https://news.google.com/rss/articles/CBMirwFBVV95cUxNaWhiUzhTcFhIMEVUSmtETzBJQzdpSFk5eHdGUnBCU0hzWk52TGcwSm0tM1JzSDlvOE5oeldiLWhyQWNxRHBwXzdhc1U1NXE5YU1QQlRDaUc1NzlIajQwWEJ2bmpJQTVVZ0dqOTc4VVVIWTh3MWlSZ1hJT0FnamRxSWxrN0JYTE4tVXgzNHRSMkRLU09HdmdpdVNUU2pLM1FtbzRvMFBUQU1INExucGlB?oc=5) |
| Pure Xbox | Double Fine Reacts To Xbox Closure Rumours With Single Emoji | [Source Link](https://news.google.com/rss/articles/CBMinwFBVV95cUxPQU9JdnhZNkFVdGxTZnd2VDB3TVdfM3FONWpCR205enMtY09acE8tLWJvdVJnQVd6eDhUQTdLSTgxOUx6STZvQTYyYW1YYlFMQmpVSlJsdmc5SlBPRTdLSFJZQnNIS3VLQkxSRGFqM0ZJOTRHVXEtaVplQ2V3RGFJRUxoSnQxMnJpQkM0MUlDbE5Lbkx5YTV2bS1SMldnSkE?oc=5) |
| GamesIndustry.biz | Xbox is reportedly considering closing South of Midnight studio, Compulsion Games, with Double Fine and Ninja Theory also allegedly at risk | [Source Link](https://news.google.com/rss/articles/CBMi-wFBVV95cUxQUmFlWjdCN2d1VHdxb0U5cDhydjhrd1dwUk12ajNOVElfLUJ2VXlkbFpXYklBZUpORWNFVEp6OEY0cGJRS21vcjF0V1FTZ2RMbmhSZUhGRTNBRVdWeEJnRnVsWmFHdlNXakk5MEh1YUNJYWcwQ2pIelZGRFZQT2Q1LWtrVVdPM2pzQmlUcFJKcVI5N3hMdzVpNUZuU21TU1JoRTVDUkRxbGthWms1ZUpOT0hBeEcwOFhjRzZCQ2p4T05ha2xZNFZ1VEZ6TkR1VUZBV1JkcHFtWnY4ZkJmWG5OSVFQYkdEUEVaVVE4dmpCVTNvdnkzQ3JEUTZocw?oc=5) |
| Push Square | South of Midnight Maker Said to Be Shuttered by Xbox | [Source Link](https://news.google.com/rss/articles/CBMilwFBVV95cUxNTkdYcmpCWTlHSGw2ZDNxUklEdmVhNmdnbjNWNndFbjVBOHU5SjVRMUxHOUVUREJPOEVleHRvLXVYQmdNS2Zpak5FaDhoeE8xcldsQl9POHZPVjJkbmN3cmZzN0diTzRqX3I1MXVMWHVXQTI1THRENWlRa0NYR3g0MFlyQlp3SlVqWUd6QWNidktXOXp0X09R?oc=5) |
| Wccftech | Xbox Plans to Shutter Compulsion Games, Arkane Lyon Also “Scared” of Being Shut Down, it’s Claimed | [Source Link](https://news.google.com/rss/articles/CBMikwFBVV95cUxOWkZsdE5wYUNyTkxOX25HOEhuWTdvSlBuRkJLZGU5MU80ZldSYUZDLUlMbThvbzFsRUlHTkZrdVpzRy1DSzJtVlFsMVFIVEhfX0owTGRYaHZKTG5URF92SlA0MDAzQkdUXzBmX2pDWGtnMnl2QVVUczlfeEdlc0RZRFBhYmNjN2piUkN0dXAtN3IwVnPSAZgBQVVfeXFMTXdJUVloeDFXNmRYaGhqNlp2MmdNTXNfSTBqb1NjQnhKRE1IeURpOGllTnVRM1U5VTJfS0RIWFo2cEtST0o1QldjYk9RUVFESjkzT2w2cUxXWThRLThDNGpOSHNXZ0szRTZDdHJFcXhwd0xwZ3JSREFlcGowMWxRaXhaZlhnZ3F2RkpjaHJ3NG4wVTRZWGk5YlU?oc=5) |
| Pure Xbox | Rumour: Journalist Suggests Two Xbox Studios Are 'At Risk Of Being Closed' In 2026 | [Source Link](https://news.google.com/rss/articles/CBMiuAFBVV95cUxOM3ZSdkY1bnBUUWxrWTBXNUx1ejRKMm5NazMycTR1Uno2ajVpWHhCQzRkcjlvTGxLemk0ZXdfejAtUFQ5cWN5RnFOZ0xsZHE4V2lwTmpWYk1LdnhQNlpyV0U5MUlVSmRBc2VGVTRTaUl5Wndhc1BpNUFNNncwdHB3cGc4djYtamY3MXB0ak55RTVxT29XZFRQd1RBN1B1cXNIU1lLdXZMNlVFTnZsQ3JlVERnd0ZuQU0t?oc=5) |
| The Verge | Xbox turmoil continues with a studio closure and executive departures | [Source Link](https://news.google.com/rss/articles/CBMilAFBVV95cUxNbk9rdV9heE9pamUwTVBMQUh2MFRSWWM3MnNlTGxnakpCZzFuVkpsRHc2SmpTTGdTWGhXSEszVk1sWk1uRmFQTjhLaVVaVXlraHo0aTFzNDJFYm5ScG5CeVRTbXlZOGpMbVk4cTNIX1Q4eWpJQWpSZWgxNU4zWTNMTjFjMU5DUm9UbnFnTkNrRmdhWnNk?oc=5) |
| TheGamer | Xbox Layoffs Reportedly Include Compulsion Games, Just After South Of Midnight's Launch | [Source Link](https://news.google.com/rss/articles/CBMicEFVX3lxTE5jQmZXSVJZZVhLTEhWWndud3RneTZLdnV2VnJ5UEViamY0N0V6TVNGUDlRS0lRbTQ3QmRtQmhhbVhydXA0VWxtbm8tbmxZRlpvS1hsVXNFNFIyYWlScjdIQVNUeHhCc1BYQlFTWGplMWw?oc=5) |
| GameGPU | Microsoft is preparing to shut down the developers of South of Midnight. | [Source Link](https://news.google.com/rss/articles/CBMinwFBVV95cUxPS2dDT1FWa3NhZXdDcWhrMU9lZUU1NGE4NU1rbFJYcF80WXJCY3lNM25jZVROUW5jVVNVTWd1aGgzSUp2Y3RUanlQN3R0dUluQmttZVN5VTFYMnQxTTNfNFV4eDdhZlhaeThfTzNNWTFfdFc0N0piNDBDT1dJd25Nb1hYZUxVSGJ3M1NsYTBMaFB0TVMwYkVJcG9feG5JZ2M?oc=5) |
| Video Games Chronicle | Xbox is reportedly shutting down South of Midnight studio Compulsion Games | [Source Link](https://news.google.com/rss/articles/CBMitwFBVV95cUxQaEVkcUpNdkxuY0dpdTkwM1J4bUlxWGVURlo0RThBLW91QUpYeW9UajZldGJqMHo1RWFPRVFSNXhvd3RMbndrcG8wTWZHUHdNQ2tIZHRxdUR3VEI4QU1iMmxETFFYeXNLRWVOZVJzTktZWGo5ZERVTTliRXMzbjZEazU4VzlNVXB6dm44bW40ZUVsTEh6UDRYQ181LTJORkx0eDQ1MlpnWTRseGpDWnM1V0dFSkVFMTg?oc=5) |
| IGN | Microsoft Has Reportedly Shut Down South of Midnight Developer Compulsion Games | [Source Link](https://news.google.com/rss/articles/CBMirAFBVV95cUxObGs5NXVvQ3V2eUN1SzdQTEpFZnNiSnN4VVIwM19HeDRlUzlWdkJJdzE5b1UzbXNIWnhrbldHQk1YdFNDY2UzUzRqUmdadjlRTWFJc2JGUWZsZWVHU296OEtiMGx2bURVVXVqLVZxa0o3bXBKV252MmNsQkZ3RWYtYlpVQnRiQ0JBMkY5RzJkLWRCWjZDd05GTXpQTGlZeXlHNXczWFJfUlppMGtU?oc=5) |

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*Canonical Source: https://pulse.byoviral.com/trend/2026-06-15/xbox-is-planning-to-shutter-peabody-award-winning-south-of-midnight-studio*