Compulsion Games May Be The First Studio To Fall In Xbox’s Restructuring Plans – Rumor

The South of Midnight developer was on a hiring spree just a short while ago, but Xbox's big reset could result in its closure.

Posted By | On 16th, Jun. 2026

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It seems like it was only yesterday that we praised South of Midnight, finding it to be an impressive title that was good enough to allow us to overlook some minor flaws in our review.

But it’s been a little over a year since then, and it seems that Compulsion Games, the studio behind the title, might be one of the two studios that Xbox is planning to close. This follows an alleged wave of layoffs that looms ominously large following this week’s rumors.

Kotaku has reported on the situation, telling us that the studio’s leadership is “in negotiations” with its parent company, but the results of that conversation are yet to be made public. After an apparent hiring spree in April, several developers have seemingly taken to social media to seek work, bracing for what’s to come.

We’re certainly going to be sad to see Compulsion go, and as always, we wish all of its talent the best of luck as they find a path forward in the aftermath. As for the other studio that’s on the chopping block, your guesses are as good as ours until an official announcement is made. Obsidian and Rare are currently the only ones that are seemingly safe, though.


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