South of Midnight's Director Says Xbox's Spending Spree Couldn't Last

David Sears says he'd probably have cut the funding sooner himself, and his studio, Compulsion Games, has since left Xbox.

David Sears says that if he'd been running Xbox, he probably would have shut off the money that paid for his own game.

Sears, the creative director of South of Midnight, was asked in an interview with the games outlet MinnMax whether he'd have closed off Xbox's flood of studio funding sooner. "Yeah, probably," he said, as Video Games Chronicle and IGN reported Tuesday. Microsoft has already answered the question for him. Under CEO Asha Sharma's overhaul of its games business, it has cut thousands of jobs, canceled projects and let studios go, Compulsion Games among them, IGN reported.

Sears said the good years never felt safe. Other directors would marvel at their luck and wonder aloud whether this was a golden age, and he'd tell them it was, for the moment. "There's always a night when Rome burns," he told MinnMax, per IGN. He didn't know which night, he said, but it always worried him.

He didn't pretend to be above the old system, either. Running the tap himself, he said, he'd have stopped other teams' money before his own game's, since he's "not completely selfless," he told MinnMax, according to IGN. Looking back, he said, the spending couldn't have lasted, so a nasty ending was always on its way.

That flow started with a shopping spree. Microsoft bought Compulsion in mid-2018, one of a run of studio purchases under then-gaming chief Phil Spencer meant to stock Game Pass, Xbox's subscription service, with new games on launch day. Forza Horizon maker Playground and Hellblade maker Ninja Theory joined that same summer, Obsidian later that year and Double Fine in 2019.

The spree reached the Westside, too. Microsoft built a brand-new studio in Santa Monica, The Initiative, to reboot Perfect Dark, a game that was later canceled.

Compulsion's share of that bet took a while to pay out. South of Midnight, published by Xbox Game Studios in 2025, came out seven years after the studio's previous game. Critics praised it, but it failed commercially, according to IGN.

The fire came this summer. Xbox's July restructuring affected 1,600 jobs right away, with another 1,600 expected to go by the end of the year, Insider Gaming reported.

Studios landed differently. Compulsion, Double Fine and Undead Labs won their independence, while Ninja Theory found no buyer and closed, and Arkane Lyon, the studio behind Dishonored 2, is still looking for one, IGN reported.

Compulsion, which is based in Montreal, finished a management buyout in August and got back the rights to its games, South of Midnight included, Insider Gaming reported, citing CEO Guillaume Provost's interview with GamesBeat. Provost said he'd asked the team whether it wanted to stay together, and the team said it would "rather eat rocks and drink gasoline" than be split up.

Even so, Sears had kind words for his old bosses. The company is much kinder now than the Microsoft he remembers from the '90s and early 2000s, he said. Back then it bought Ensemble Studios and shut it a couple of games later, he noted, and he gave today's Microsoft credit for letting studios walk out the door instead.

So the money now has to come from players. With publishing rights moving back to the studio, Provost told GamesBeat, according to Insider Gaming, buying Compulsion's games now supports Compulsion itself.

Source: ign.com, retrieved November 3, 2026. Other sources: insider-gaming.com.