Xbox reportedly to close Compulsion Games studio

A report says Xbox plans to shut down Compulsion Games, the Montreal studio behind We Happy Few and South of Midnight. Xbox did not respond to requests for comment.

The report does not give a date for the closure. It is unclear how many employees will be affected; Compulsion is believed to employ more than 100 people.

Earlier reporting suggested Xbox could close two studios in 2026, and Compulsion has been identified as one of the studios included in those plans.

Compulsion’s most recent release, South of Midnight, won a Peabody Award and received praise for its storytelling and design. Sources indicate the game may not have met Microsoft’s commercial expectations; no official sales figures or internal assessments have been published.

The report includes no details on severance, staff transfers or the status of Compulsion’s ongoing projects. No timeline for a shutdown has been provided.

Further information was not included and Xbox has not issued a public statement confirming the report.