Xbox is planning to close Montreal-based Compulsion Games, the studio behind last year’s award-winning South of Midnight, according to Kotaku. The publication notes that more than 90 employees are expected to be impacted by the closure. Just two months ago, Compulsion had been hiring for an unannounced new IP.
This news comes just three weeks after many of the Compulsion team members attended the Canadian Game Awards to receive seven awards, including Game of the Year, for South of Midnight. The action-adventure game, which focuses on an African-American woman helping her community heal from deep-seated traumas, has also garnered strong reviews and multiple other award wins, including honours from the prestigious Peabody and BAFTA bodies. Once again, it’s a stark reminder the video game industry will still routinely shut down studios even if they release a beloved game.
Members of Compulsion accept one of many awards at the Canadian Game Awards on May 21.
It also comes amid Xbox’s recent confirmation that it’s set for a major “reset” amid the recent appointment of CEO Asha Sharma following declining revenue. At the time, it was also reported that Xbox was planning significant layoffs, and now, it would seem like Compulsion is among them.
But what makes this especially frustrating is how Microsoft as a whole continues to do well. Last quarter alone, the company brought in US$82.9 billion (about C$116.1 billion) in revenue, an 18 per cent year-over-year increase. And company will happily invest billions of those earnings into AI and other ventures while professing to not be able to afford its many talented game developers.
It raises the question of why you should be allowed to make all of these mergers and acquisitions, including a US$69 billion acquisition of Activision Blizzard, if you’re just going to close down studios and lay off many more employees. Xbox acquired Compulsion, specifically, in 2018, right before it launched its second game, We Happy Few. In other words, Xbox only gave it the opportunity to release one game before it ultimately axed it.
As Kotaku notes, Sharma and long-running Xbox exec, recently appointed CCO Matt Booty, both praised Compulsion for its award-winning work in a recent Game File interview. They pointed to the game as an example of the sort of acclaimed games they’d like to keep making. And yet, Booty — who has overseen countless studio closures and layoffs at this point — continues to fail upwards.
Compulsion was originally founded in 2009 by Guillaume Provost, who had previously worked for Arkane Studios. (In a sad twist of irony, Xbox also shuttered Arkane Austin, which made the celebrated Prey reboot, in 2024.) Compulsion’s first game was Contrast, a Belle Epoque-inspired puzzle-platformer.
Image credit: Xbox
Source: Kotaku
