We’re following a fast-moving story that, if true, could mark one of the earliest casualties in the wave of alleged Xbox studio reshuffling this weekend. Per Push Square, and citing Kotaku, the developer behind South of Midnight, Compulsion Games, is reportedly facing closure — although there are conflicting signals about the studio’s future and nothing has been officially announced. Take this with a pinch of salt as details continue to change.
What Was Reported
Key Details
According to Push Square, which points to reporting by Kotaku, Compulsion Games “will be among the first to fall” amid rumours of incoming Xbox studio closures. The total number of job losses is unknown; however, LinkedIn is said to list about 90 employees at the Montreal-based studio. The studio was acquired by Microsoft in 2018, months prior to the release of We Happy Few.
Push Square also reports that various staff, including South of Midnight writer Zaire Lanier, have indicated on social media that they are looking for work. Importantly, Push Square underlines that nothing has been officially announced at the time of publication.
In an update logged by Push Square on Mon 15th Jun 2026, 6:30pm, Kotaku added that “according to one source at the studio, Compulsion leadership is in ‘negotiations’ with Microsoft over the studio’s fate, but the details of these negotiations have not been disclosed.” Push Square notes those negotiations could potentially comprise the studio regaining its independence, although further updates are required to know for sure.
The story sits alongside other reporting this weekend: The Game Business is said to have reported that Xbox Game Studios boss Craig Duncan had resigned from his role less than two years after taking the job, and that Chief of Staff Louise O’Connor is also said to have left. Additionally, CEO Satya Nadella is reported to have said Xbox needs to become a “sustainable business” following “25 years of subsidies” and quipped “there's more monetisation of Xbox games happening on YouTube than at Microsoft.”
The Source & Credibility
Who’s Saying What
Our coverage here is based on the facts pulled together by Push Square, which in turn references reporting from Kotaku and mentions of coverage from The Game Business. The key new detail — that Compulsion leadership is in ‘negotiations’ with Microsoft — is attributed to “one source at the studio,” per Kotaku and relayed by Push Square. We urge readers to remain sceptical: Push Square explicitly notes there has been no official announcement.
Items such as the LinkedIn headcount, staff social posts, and the update timestamp are concrete points included by Push Square. The negotiations detail is currently unverified beyond that single-source claim; again, take this with a pinch of salt until Microsoft, Compulsion, or another primary source confirms next steps.
What It Could Mean
Possible Outcomes And Uncertainties
If the reporting is accurate, the immediate unknown is the scale of job losses — total cuts are unreported and described as “unknown.” The LinkedIn figure of roughly 90 employees gives some context to the studio’s size but not to how many roles, if any, could be affected. The Kotaku update that leadership is in “negotiations with Microsoft” introduces an alternative scenario: those talks could, reportedly, involve the studio regaining independence rather than a straight shutdown.
Context from other coverage this weekend — including reported executive departures and public comments from Satya Nadella about Xbox needing to be a “sustainable business” — could be read as signals for tighter financial discipline at the platform holder, if one accepts the reporting at face value. But we have no direct confirmation linking those broader leadership moves and comments to the specific fate of Compulsion Games.
From a creative standpoint, South of Midnight is noted to have won multiple awards, including the Games for Impact gong at last year’s The Game Awards, and it “released on the PS5 earlier this year.” Those facts underline that this is an award-winning studio with recent cross-platform output — but again, the exact future remains unclear.
Why This Matters
Why should readers care? If true, the potential closure or restructuring of Compulsion Games would touch on several hot-button issues: the security of mid-size studios inside major platform owners, how award-winning smaller titles fare commercially, and what direction Xbox will take as it aims to become a “sustainable business,” per the quoted comments. The human element is immediate as well — staff reportedly looking for work, including named personnel, signals careers potentially in flux.
We’re watching this story closely. Per Push Square and the updates they relay from Kotaku, there are active negotiations being claimed by an internal source, but no official confirmation yet. We’ll update when verifiable information emerges. Until then, treat the claims as unconfirmed and evolving.
