Compulsion Games May Be Getting Shut Down By Xbox, Says Report

Update [Mon 15th Jun 2026, 6:31pm]: Kotaku has since up to date its report to say that, in line with one supply, Compulsion is in negotiations with Microsoft about its future.

Here’s the complete replace:

Update 1:15pm ET: “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.”

Original Story: Just a couple of minutes in the past, we reported on a hearsay that steered Xbox may very well be closing two studios in 2026, with one in every of them being Compulsion Games – the studio behind We Happy Few and South of Midnight.

The of us over at Kotaku are additionally now reporting that Compulsion Games is ready to be shut down, with the outlet stating it is “unclear” how many individuals can be impacted, though the studio probably employs over 100 employees proper now.

“Xbox is planning to shut down Compulsion Games, developer of Peabody Award-winning South of Midnight and We Happy Few, Kotaku has learned.”

Xbox reportedly did not reply to a request for remark when approached by the outlet.

Of course, the newest launch from Compulsion Games was South of Midnight, which drew loads of plaudits all through the trade for its creativity, however hypothesis has steered it did not carry out in addition to Xbox had hoped.

We completely cherished the sport right here at Pure Xbox although, giving it an “Excellent” 9/10 rating in our evaluation and praising it as an “engaging adventure that delivers soulful stories in spades”.

We’ll regulate the state of affairs and allow you to know if Xbox responds to this report within the close to future.