South of Midnight Dev First Xbox Studio Hit With Layoffs

Image via Compulsion Games

Published Jun 25, 2026, 4:11 AM EDT

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South of Midnight developer Compulsion Games has laid off a number of its staff, seemingly kicking off a potentially much bigger round of Xbox-wide layoffs and even studio closures. South of Midnight released in April 2025 to solid critical acclaim but doesn’t appear to have moved the needle as much as it needed to, leading to the team behind it being affected by Xbox’s latest restructuring efforts.

Compulsion Games Dev Talks Research and Representation in South of Midnight

Game Rant speaks with Compulsion Games’ studio head Guillaume Provost about South of Midnight’s origins, design, and player response.

South of Midnight Developer Compulsion Games Hit by Layoffs

As reported by Rebs Gaming on Twitter, Compulsion Games was hit with mass layoffs, leaving many of its staff out of work. Notably, while many former employees posted about their experiences working on South of Midnight, there’s been no concrete mention of Compulsion Games itself being shut down. This means that rumors of the studio’s closure have neither been confirmed nor denied, though Rebs believes that this is definitely the case. The developers now out of work include writers, narrative designers, 3D and concept artists, and dialogue designers at the very least, with more of them likely to show up in the coming days.