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

Live updates

1. 1d ago

   Xbox Confirms Closure of Award-Winning Compulsion Games Studio

   Microsoft's Xbox has confirmed the shutdown of Compulsion Games, the Montreal studio behind *South of Midnight* and *We Happy Few*, as part of ongoing layoffs. The studio won seven awards at The Canadian Game Awards, including Game of the Year, weeks before the closure was announced. Negotiations between the studio and Xbox leadership are reportedly ongoing, with two other Xbox studios also said to be at risk. The move follows a broader restructuring wave at Xbox Game Studios.

   What's confirmed:

   • Xbox has confirmed the closure of Compulsion Games as part of its June 2026 layoffs, affecting the Montreal studio behind *South of Midnight* and *We Happy Few*.
   • Compulsion Games won seven awards at The Canadian Game Awards, including Game of the Year, just weeks before the shutdown was announced.
   • The studio’s closure is part of a broader restructuring at Xbox Game Studios, with two other Xbox studios also reportedly at risk.
   • Negotiations between Compulsion Games and Xbox leadership are underway, though no details on outcomes have been confirmed.

   Still unconfirmed:

   • Reports indicate Xbox may have partnered Compulsion Games with Sweet Baby Inc. on *South of Midnight*, though no official confirmation exists.
   • The next wave of Xbox layoffs could shut down additional studios beyond Compulsion Games, though no names or confirmation have been provided.
   confidence 92%
2. 1d ago

   Xbox Shuts Down Compulsion Games Amid Studio Closures, Negotiations Ongoing

   Microsoft’s Xbox has confirmed the closure of Compulsion Games, the Montreal studio behind *South of Midnight* and *We Happy Few*, as part of a broader restructuring. Negotiations between the studio and Xbox leadership are reportedly underway. Two other Xbox studios are also said to be at risk. The move follows mass layoffs at Xbox Game Studios announced for June 2026.

   What's confirmed:

   • Xbox is shutting down Compulsion Games, the Montreal studio behind *South of Midnight* and *We Happy Few*, as part of wider studio closures.
   • Negotiations between Compulsion Games and Xbox leadership are currently taking place.
   • Microsoft acquired Compulsion Games in 2018, and the studio’s latest game, *South of Midnight*, has won multiple awards, including a Peabody.
   • Mass layoffs at Xbox Game Studios were previously reported to occur by the end of June 2026.

   Still unconfirmed:

   • Two other Xbox studios may also be at risk of closure in 2026.
   confidence 92%
3. 1d ago

   Xbox to Shut Down Peabody-Winning Compulsion Games Amid Studio Restructuring

   Microsoft’s Xbox is shutting down Compulsion Games, the Montreal studio behind *South of Midnight* and *We Happy Few*, as part of broader layoffs and studio closures. Negotiations between the studio and Xbox leadership are ongoing. Two other Xbox studios are also reportedly at risk. The move follows recent reports of mass layoffs at Xbox Game Studios by the end of June 2026.

   What's confirmed:

   • Microsoft’s Xbox is preparing to close Compulsion Games, the Montreal-based studio behind *South of Midnight* and *We Happy Few*.
   • The shutdown is part of broader layoffs and studio restructuring at Xbox Game Studios, with two other studios also reportedly under threat.
   • Mass layoffs at Xbox Game Studios are expected to occur by the end of June 2026, according to multiple reports.

   Still unconfirmed:

   • Arkane Lyon, developers of *Dishonored*, *Deathloop*, and *Marvel’s Blade*, may also face closure as part of Xbox’s restructuring efforts.
   confidence 90%
4. 1d ago

   Xbox to Shutter Peabody-Winning Compulsion Games Studio

   Microsoft’s Xbox is preparing to close Compulsion Games, the studio behind *South of Midnight* and *We Happy Few*, despite its recent Peabody Award win. Studio leadership is reportedly in negotiations with Microsoft over its future. The shutdown follows broader layoffs and restructuring at Xbox Game Studios. Two other Xbox studios are also rumored to face closure.

   What's confirmed:

   • Compulsion Games, developer of *South of Midnight* and *We Happy Few*, is being shut down by Xbox.
   • The studio’s leadership is currently in negotiations with Microsoft over its future, though no terms have been released.
   • The shutdown comes two months after Xbox executives publicly praised *South of Midnight* for winning a Peabody Award.
   • This move follows recent layoffs and executive departures at Xbox Game Studios.

   Still unconfirmed:

   • Two other Xbox studios may also be at risk of closure in 2026.
   • Arkane Lyon is reportedly "scared" of being shut down as part of Xbox’s broader restructuring.
   • The shutdown is part of a larger "business reset" at Microsoft and Xbox.
   confidence 97%