According to IGN, Microsoft plans to close South of midnight and Compulsion Games, a developer of the Little Lucky. The workshop was created in 2009 by Guillaume Provost, a senior developer of Arkane Studios, and was unique to the industry with a narrative of fantastic art style, strange worldview and hand-mass.
The first game of Compulsion Gomes, an outsourced production team, was launched in 2013 as a puzzle-solving platform game, Contrast. The survival horror game ” The Little Lucky ” , launched in 2018, was launched by Gearbox, a series of developers of The Land of No Homes. At that time, Microsoft had acquired the company and placed it under the banner of Microsoft Studios (now Xbox Game Studios).
Kotaku reported that the Compulsion studio may have been downsized by more than 90 people and that just a few months ago the studio was still recruiting for a new IP. According to sources, the Compulsion leadership is conducting “negotiations” with Microsoft on the future of the studio and it is not clear where these negotiations will go.
Several hours before the news was released, it was reported that Craig Duncan, head of Xbox Game Studios, and Louise O ‘ Connor, chief of staff, had left Microsoft after decades of service.
South of midnight was a motion-adventure game in the context of a fictional southern United States, which was launched in April 2025. Although the reputation of the industry is good, it is not favoured by players. It is time to land on PS5 and NS2 platforms in March this year. According to data analysis agencies Gamalytic and SteamDB, South Ending has sold only 66,000 to 88,000 at Steam, with only over 1,400 online players at the same time, with sales of about $3 million.
The Managing Director of Compulsion Game, Guillaume Provost, has revealed that there are more than 1 million players in the game less than a month. It is widely recognized, however, that the majority of the users of free subscriptions to XGP have failed to translate into substantial buyout sales profits.
Just last week, the new Xbox master, Asha Sharma, warned that the company would be “reorganizing”, most of whom saw it as a signal from Microsoft’s plan to undertake large-scale layoffs and close down the studio. According to the analyst, “the companies most affected are known to be outside, but the financial statements are indescribable”. Microsoft is known to be accelerating the development of new Playbooks, Radiation and Halo-ring games, while considering restructuring and even stripping their play sectors.
In a memorandum from the earthquake industry in Sharma, it was revealed that the current responsible profit margin (assuming a profit margin) for Microsoft games was only 3 per cent, a decrease over the same period. “Without the blizzard King, our continued investment in content, platform and hardware subsidies has exceeded $20 billion over the past five years, but our annual income has fallen by nearly $500 million during this period. Looking to the future, this cannot continue.”
Following the release of the memorandum, the Chief Executive Officer of Microsoft, Satya Nadra, stated that “the Xbox game on YouTube is better off than the Xbox itself” and that Xbox needs to think about “economically viable innovations in hardware and games”. He added: “No one can blame Microsoft for its investment over the past 25 years. We must now turn it into a sustainable development business that continues to provide one of the best entertainment elements.”
The news of the closure of the Compulsion studio marked a major change in Xbox’s mood, following a series of welcome changes and a well-received Xbox show that began to reverse the attitude of the core fans. The question now is whether Craig Duncan’s departure and the cuts in Compulsion Game are all about change or whether there will be more cuts.
