Xbox Is Reportedly Closing Compulsion Games, Ninja Theory Also Said to Be at Risk
Microsoft reportedly plans to close Compulsion Games, with Ninja Theory and Double Fine also at risk, in a sweeping Xbox restructuring.
Microsoft is moving to shut down Compulsion Games, the studio behind South of Midnight, according to a report from PC Gamer. The closure is part of a wider Xbox reset that could also spell the end for Ninja Theory and Double Fine, the article claims, citing unnamed sources familiar with Microsoft’s plans.
The news lands less than six months after Xbox corporate communications publicly highlighted Compulsion’s award-winning developers, a pivot from pride to pink slips that makes the reported decision feel especially hollow. South of Midnight only released in 2025, and a shutdown this soon robs the team of any long-term iteration on the IP it just shipped.
If accurate, this is the kind of consolidation that leaves fewer studios making the weird, mid-budget single-player games Xbox once said it wanted to protect. Losing Compulsion would mean losing the lineage that produced Contrast and We Happy Few, and the risk to Double Fine threatens an outfit that essentially is the modern legacy of adventure-game preservation. It’s a gutting prospect for anyone who values a varied Game Pass catalog over a pipeline of nothing but live-service safe bets.