Microsoft is reportedly shutting down Compulsion Games, the developer behind the action-adventure title South of Midnight. This move signals a broader restructuring effort within the Xbox division as leadership attempts to stabilize financial performance. The studio closure follows recent layoffs and reflects a strategic shift announced by Xbox CEO Asha Sharma.
Microsoft reportedly closes the studio behind South of Midnight amid broader restructuring efforts and financial concerns.
Compulsion Games joined the Microsoft family in 2018 after being acquired from other publishers. Before joining Xbox, the studio created titles such as the puzzle-platformer Contrast and the social deduction game We Happy Few. The team was previously developing a new intellectual property to expand their portfolio beyond these earlier successes.
Xbox leadership is reevaluating its investment strategy amid declining revenue margins over the past five years. Asha Sharma stated that excluding Activision Blizzard King, the company spent more than $20 billion on content and hardware subsidies during this period. Despite these massive expenditures, annual revenue dropped by nearly half a billion dollars in the same timeframe.
The shutdown comes at a time when Compulsion Games was actively recruiting for new roles to support its upcoming projects. Talent lead Joe Palin advertised for programmers just two months before the closure reports emerged. This hiring activity suggests the studio was still operational and planning future development prior to the decision.
Microsoft has not yet officially confirmed the closure of Compulsion Games, so the report remains unverified. The Xbox CEO described the business as being in an unhealthy spot that requires a complete reset. Players and developers are now awaiting official confirmation regarding the status of Compulsion Games and its unfinished projects.
Source: VideoGameChronicles
