Compulsion Games Eyes New Direction After South of Midnight

Now that South of Midnight is free to pursue its own destiny, the studio behind the game is actively seeking collaborations with other partners. Creative director David Sears hints that the next project could be very different from the current title, noting that the game itself may not have been the best business move.

In an interview with MinnMax’s Ben Hanson, Sears explained that Microsoft funded games like South of Midnight and Double Fine’s Keeper not because they were expected to generate huge profits, but to boost the company’s prestige and leave a cultural legacy. He warned that relying on such generous support is risky, saying that “the money tap will eventually close, and the fallout will be painful.”

Sears admitted he would not have funded South of Midnight himself, acknowledging that the venture was unsustainable in hindsight. He recalled conversations with other directors who questioned how the project kept getting lucky, and responded that the situation was “for now,” aware that “Rome will burn” at some point.

He also observed that today’s Microsoft is far more humane than the 1990s version, allowing studios to spin off rather than shut down completely.

Beyond South of Midnight, Compulsion is known for the 2018 title We Happy Few, developed with Gearbox Publishing. Microsoft acquired the studio just before the release, bringing it into Xbox Game Studios. The team then began work on South of Midnight, which went on to win several awards, including a BAFTA, after its 2025 launch. Following a recent restructuring, Compulsion was spun out from Microsoft, taking its intellectual property and an undisclosed financial runway with it. As of now, it remains unclear whether the studio has secured a new project.