Microsoft reports South of Midnight developer closure

Microsoft is said to be shutting down xbox Subsidiary Compulsion Games, developer of 2025 south of midnightAs part of the company's plan to restructure the Xbox brand. It's currently unclear how many employees at the Montreal-based Xbox Studios will be affected by the possible closure.

Compulsion Games' most recent release was in 2025. south of midnightThis is an action game depicting the folklore and culture of the American South. south of midnight It was later released on Switch 2 and PS5 on March 31, 2026, as part of Microsoft's efforts to expand some of its IP to other platforms. south of midnight Premium, Ultimate, and PC subscribers can also enjoy it on Xbox Game Pass. The title won the Games for Impact award at The Game Awards 2025 and the Best New Intellectual Property award at the 22nd BAFTA Game Awards. But these accolades alone may not be enough to keep Compulsion Games afloat.

May force game to end

Hours after Xbox Game Studios head Craig Duncan announced he was leaving Microsoft, reports emerged that the tech giant was considering further job cuts. According to sources south of midnight, we are happyand differenceIt could be shutting down as part of Xbox's “reset” effort. However, sources at Compulsion Games added that the studio is negotiating with Microsoft over its potential fate, although no details have been revealed. This report comes two months after Compulsion Games looked to hire some programmers for a new, unreleased IP project. Given the uncertain state of Compulsion Games, it's unknown what will happen to the unannounced IP. As of this writing, neither Microsoft nor Compulsion Games have officially commented on the situation.

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Identify the cover art by scraping off as little of the foil as possible.

scratch and pick

Identify the cover art by scraping off as little of the foil as possible.

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The news comes just days after Xbox CEO Asha Sharma released a letter outlining a reset of the gaming sector's infrastructure. Sharma's letter to Xbox employees did not specify that layoffs would occur, but sources said potential job cuts could occur after Microsoft's current fiscal year ends on June 30. Sharma said that despite the Activision Blizzard acquisition, Xbox has spent more than $20 billion over five years on ongoing investments, while profit margins are down 3% year over year.

South of Midnight 1 million player interview

Marketing budgets and game studios are potentially at risk, but it's unclear how big of a cut Xbox is planning. But Xbox's financial reset may not end there. Xbox sales are reportedly “on the table” for Microsoft, according to a separate report released on June 12. These potential moves include restructuring Xbox into a wholly owned subsidiary of Microsoft, similar to GitHub. If Xbox becomes a wholly-owned subsidiary, it could be used to sell the gaming giant to another company or form a joint venture with another corporate partner.

Find the strange thing before the timer reaches zero.

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A June 12 report also states that Xbox may be doubling down on key IPs such as: halo, Elder Scrollsand falloutIt's part of an effort to produce more first-party titles at a faster pace. With Compulsion Games potentially closing, it's still unknown what the fate of Xbox's smaller IPs will ultimately be.