The director of South of Midnight is looking back at the game's Xbox era with clear eyes. Speaking about Compulsion Games' split from Microsoft, the director said Xbox funding the project was "unsustainable," at least in hindsight, Rock Paper Shotgun reports — adding, "There's always a night when Rome burns."

Compulsion parted ways with its former owners after landing on the long list of things Microsoft decided to shed during this year's multi-round mass cuts. The studio, which Microsoft acquired in 2018, shipped the Southern-gothic action game under the Xbox banner before the relationship ended.

The comments add a developer's-eye view to one of 2026's defining industry stories: Microsoft's sweeping retrenchment across its gaming division. Studios and projects that once seemed safely housed inside the Xbox portfolio have been cut loose or shuttered as the company reworks its spending, and South of Midnight — a mid-sized, single-player, new-IP bet — sat squarely in the category Microsoft has backed away from.

That a director would describe his own game's funding model as unsustainable is a candid admission of how the economics looked from inside. For Compulsion, now out from under Xbox ownership, the question becomes what a post-Microsoft future looks like — and whether games like South of Midnight can find backers elsewhere.