South of Midnight director says he wouldn’t have funded it if he was Xbox, and he knew ‘Rome would burn’ eventually

Key Points:

• South of Midnight, developed by Compulsion Games and released on multiple platforms between 2025 and 2026, attracted over one million players within its first three weeks, including Game Pass users.
• Despite initial support from Xbox to fund distinctive, non-blockbuster games, Microsoft announced in July 2026 a major business reset involving studio cuts, including Compulsion Games, which was allowed to regain independence rather than being shut down.
• South of Midnight director David Sears expressed skepticism about the sustainability of Xbox’s funding model for diverse, less commercially mainstream games, suggesting that large companies inevitably cut less profitable ventures.
• Sears acknowledged the positive experience of working with Microsoft but admitted he likely would not have greenlit funding for South of Midnight himself, viewing the approach as ultimately unsustainable and prone to abrupt termination.
• He praised Microsoft’s more humane approach compared to its past, highlighting the company’s decision to let Compulsion become independent again, contrasting it with previous studio closures like Ensemble in the early 2000s.