The video game industry is no stranger to heartbreaking news, and the latest round of Cuts at Microsoft-owned studios. It’s yet another continuation of that. They say people start to become numb to certain sensations and it seems like we’ve reached a point where my own emotions are starting to go unnoticed after this repeated news cycle.
On June 25, 2026, gaming reporter. Rebs Games shared the latest update on X, stating that Layoffs had begun at Compulsion Games.the team responsible for the development South of midnight. We knew this was going to happen and, in fact, many were hoping for potential acquisitions from these studios so they could continue their work and make a living under another publisher.
Compulsions games were known for their distinctive flavor, with titles like We are a happy few South of midnightand one of my personal favorites, Contrast. A film noir-inspired puzzle platformer, Contrast was a perfect summary of the work you could expect from Compulsion games.
These reductions constitute a larger change within Microsoft’s gaming division, as Asha Sharma seeks to “right the ship” of the decadent Xbox brand. Since both budgets and studios within the group have ballooned beyond reason, steps are being taken to reduce the problems before an even greater collapse occurs.
Don’t get me wrong, I’m not defending this at all. Quite a while ago, I remember writing another article about the closure of Tango Gameworks, developer of Hi-Fi Rushwhere I mentioned that Microsoft should not buy companies it could not afford.
It can be hoped that these layoffs will not lead to the complete closure of Compulsion Games. One can hope that its uniqueness is better aimed at games like its previous entries, such as Contrast, rather than longer, less budget-friendly projects.
Responses to the news have varied. Some fans lament the loss of potential sequels or new ideas from a studio known for taking creative risks. Others maintain that Such adjustments are essential for long-term viability.especially when resources need to be reallocated toward projects with broader appeal.
What saddens me is that, regardless of the current need to do so, it seems to me that these decisions are still a reflection of the direction Xbox had previously taken. Sure, Phil Spencer is no longer at the helm, but people like Matt Booty who oversaw previous operations are still around.
To make matters worse, there is still more to come, and there are ongoing discussions among a group of Xbox studios. ninja theory, Double Fineand more are all under the pressure of a possible closure or layoffs within its walls. Previously we heard that ninja theory is completely done, and Senua’s reveal is a last-ditch effort to give the studio a chance to be bought out.
Regardless, we hope that the future of these studios will be greeted with a kind hand, one that guides them toward the light rather than shutting them down forever.
Join us on Reddit at r/WindowsCentral to share your ideas and discuss our latest news, reviews and more.
