XBOX is Reportedly Planning to Shut Down Compulsion Games

Last week, some reports hinted that XBOX might announce major layoffs in July. Although, the company hasn’t officially said anything about it, the CEO recently hinted at making radical changes to its business strategy.

That’s not all, earlier today, The Game Business reported that XBOX Games Studios lead, Craig Duncan, has stepped down from his role. Accompanyig him is the Chief of staff, Louise O’Connor, who is also stepping down from her role at XBOX Games Studios.

Compulsion’s future is still being decided

Now, an exclusive report by Kotaku claims XBOX is considering shutting down Compulsion Games, the award-winning studio behind South of Midnight and We Happy Few. However, the situation appears to remain fluid, with an update from the news outlet revealing that studio leadership is currently in negotiations with Microsoft over Compulsion’s future.

According to Kotaku, the Montreal-based studio could become part of XBOX’s wider restructuring efforts, which reportedly include layoffs and significant changes across Microsoft’s gaming business. While the details around the reported negotiations haven’t been disclosed, and it remains unclear whether the talks could prevent a shut down.

For those unaware, South of Midnight launched earlier this year to strong critical acclaim and recently earned a Peabody Award for its storytelling. XBOX executives have also publicly praised the studio in recent months. Speaking to Game File in April, Xbox CEO Asha Sharma said, “The big things that we’re thinking about are we want to make great games.”

She added, “The Peabody Award for South of Midnight, Kiln coming out today. Like, I just feel like every day there’s something wonderful there.” Chief Content Officer Matt Booty echoed those comments, stating, “South of Midnight today won a Peabody Award, which I think is such a validation of the storytelling capability of games these days.”

It’s unclear what exactly went wrong for Compulsion Games. We’ll know more when Microsoft officially responds to the report. If we hear anything, we will update this piece.