Xbox News

Multiple developers connected to South of Midnight studio Compulsion Games say their time at the company has ended, adding another painful chapter to Xbox’s ongoing restructuring.

Xbox’s rumored studio shake-up appears to have reached Compulsion Games. According to a DualShockers report, several developers from the Montreal-based studio behind South of Midnight have publicly indicated that they were let go, following weeks of speculation around wider cuts inside Microsoft’s gaming operation.

The affected roles described in the report do not point to one single department. The examples cited include narrative design, dialogue design, 3D environment art, and character concept art—disciplines that sit close to the creative core of a story-heavy studio like Compulsion.

That spread matters. When layoffs touch multiple creative lanes, the concern is not just about headcount, but about what kind of studio emerges on the other side. Compulsion’s recent identity has been built around stylized worlds, characterful writing, and a specific mood that made South of Midnight stand apart from Xbox’s bigger tentpole franchises.

Compulsion had already been tied to Xbox closure rumors

The latest reports land after Compulsion was already named in rumors about possible Xbox studio closures or negotiations. The exact status of those conversations has not been made public, and Microsoft has not detailed a studio-by-studio plan. Still, the developer posts referenced in the report suggest that job cuts have moved from rumor into reality for at least some staff.

For Xbox, the timing is especially sensitive. The brand has been trying to project confidence through showcases, Game Pass releases, and upcoming first-party projects. At the same time, repeated rounds of reductions have made it harder for players and developers to trust the long-term stability of any one team inside the Xbox portfolio.

Xbox’s cuts keep colliding with its creative ambitions

The broader context is difficult to ignore. Xbox has spent years expanding through major acquisitions, including Bethesda and Activision Blizzard King, while also facing internal pressure to make the gaming business more efficient. DualShockers’ report frames the Compulsion cuts as part of a larger reset under new Xbox leadership, with revenue pressure and enormous recent spending shaping the conversation.

That creates a strange contradiction for fans. Xbox’s lineup still contains projects that can generate real excitement, from franchise revivals to prestige single-player games. Yet each new round of cuts makes the ecosystem feel less like a creative home and more like a spreadsheet that can be reshuffled at any moment.

What this means for South of Midnight’s studio

For now, the key unknown is what Compulsion Games looks like after these reported departures. A studio can survive a layoff and still make strong games, but creative continuity is fragile. Losing writers, artists, and designers affects institutional memory, especially at a team whose voice depends on mood, dialogue, and visual specificity.

South of Midnight was not just another release on Xbox’s calendar. It was the sort of stylized, authored project Xbox often says it wants in its first-party slate. If the people who helped shape that identity are now exiting, Xbox will need to prove that its restructuring can preserve the very creativity it promotes on stage.

Until Microsoft offers more clarity, the Compulsion news will be read as part of a larger pattern: Xbox continues to chase blockbuster scale while asking its studios to absorb the cost of corporate correction. For developers, that cost is personal. For players, it raises a familiar question—what does a healthy Xbox first-party strategy actually look like?

This Koigen report is based on public reporting from DualShockers and publicly visible developer statements cited in that coverage.