South of Midnight creative director David Sears says he probably would not have continued funding the game if he had been in charge of Xbox’s spending at the time. Xbox funded and published the 2025 action-adventure, set in the American Deep South, and Sears has described it as a “generational” game that he hopes people will discover and play for years.
Speaking to Ben Hanson on MinnMax, Sears said he had worried that Microsoft’s spending under then-leaders Phil Spencer and Sarah Bond would not last. He recalled warning that the flow of money could eventually stop, with painful consequences for the studios and projects that depended on it.
Asked whether he would have stopped funding games such as South of Midnight, Sears answered, “Yeah, probably.” He added that he wanted to make the game, but, looking back, would have cut off the spending before it reached that point because the approach seemed unsustainable.
Microsoft’s large investments in studios and franchises were intended to help grow Xbox Game Pass. The company has since changed direction, with cost-cutting measures that included layoffs, studio divestitures and game cancellations. Sears said he had sensed during the spending boom that it might not last, even as other directors wondered whether the industry was experiencing a golden era.
Compulsion Games, the studio behind South of Midnight, was spun out and is now independent, seeking new projects and sources of funding. The game launched on Xbox and PC in April 2025 and later arrived on PS5 and Switch 2 in March 2026. According to the source, purchases now support Compulsion directly rather than Xbox.
Sources: GameSpot.