Xbox's Only 2025 Game Award Winning Studio Marked For Sudden Closure

Xbox Game Studios hasn’t exactly performed well at The Game Awards in recent years.

It did, however, pick up a trophy at 2025’s ceremony.

Compulsion Games’ delightful action-adventure South of Midnight did what no other Xbox Game Studios title could, walking away with the prize for Games For Impact.

The third-person title followed weaver Hazel who found herself drawn into a world of Southern Gothic folklore after her mother was whisked away by a great storm.

Combining stop motion animation with a stellar soundtrack, South of Midnight is unlike anything else released in recent years.

It’s a brilliant game that garnered a score of eight from us here at GAMINGbible.

Xbox Game Studios

“South of Midnight is, for me, an unmissable experience despite playing it safe in a couple of key areas,” we began.

“This is an exceptional adventure that I simply couldn’t put down and I truly hope it’s not the last journey I’ll venture on with Hazel.”

Sadly, it looks as if it’ll be precisely that as Xbox is reportedly considering closing Compulsion Games.

It had been a prosperous start to the year for Xbox with new CEO Asha Sharma heralding in a new era that harkened back to Xbox’s glory days.

Price reductions on Xbox Game Pass and a shift back to exclusive first-party game releases won over the favour of fans.

It was only a matter of time, though, before Sharma had to begin looking at Xbox’s deep-rooted financial woes.

It’s recently come to light that she’ll be overseeing mass layoffs across Xbox with a number of respected teams at risk.

That includes Compulsion Games.

Compulsion Games Is One Of Three Beloved Studios Being Considered For Closure

It’s far from the only beloved studio at risk. Xbox has reportedly also ordered the closure of Ninja Theory and Double Fine.

Ninja Theory only just announced new title Senua at the recent Xbox Showcase, while Double Fine is the developer behind beloved first-party titles like Kiln and Keeper.

It’s a very sad day for the industry but all hope is not lost.

According to Kotaku, a source at Compulsion Games has said that leadership is in negotiations with Microsoft.

It’s not detailed what these negotiations include but it was only in recent months that Compulsion Games began hiring for work on a new IP.

It’s a similar story for Ninja Theory who, as per a report from The Verge, are also in negotiations.

The Verge details that Ninja Theory is hoping to go independent, adding that Compulsion Games and Double Fine could also spin-off.

It wouldn’t be the first time this has happened. Toys For Bob broke away yet maintains a partnership with Microsoft and former owner Activision.

This is the downside of major companies acquiring smaller studios.

When push comes to shove, these mid-sized studios are always the first up to the chopping block and yet, it’s often these studios that infuse the industry with abundant creativity.

South of Midnight, Kiln, and Keeper are all stellar examples of brilliant new IP; it’s unthinkable that these studios could be sunsetted.

This is a developing story with Xbox yet to publicly comment.

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