"We're Closing Those Floodgates": Why South of Midnight's Director Says Xbox Shouldn't Have Funded His Own Game
Hearing a creative director openly state that their publisher probably should not have bankrolled their own game is almost unheard of in the video game industry. Yet that is the exact assessment delivered by David Sears, an industry veteran (best known for helming the early SOCOM franchise) and the creative director behind South of Midnight at Compulsion Games. Speaking with Ben Hanson on MinnMax, Sears reflected candidly on Xbox's baffling budget management in the years leading up to the Montreal studio's return to independence.
The Illusion of Infinite Money at Xbox Game Studios
Acquired by Microsoft in 2018 alongside a wave of mid-sized studios meant to fuel the Xbox Game Pass pipeline, Compulsion Games spent years operating inside a surreal financial bubble. Throughout the development of South of Midnight, Xbox leadership signed off on hefty budgets for artistic, prestige-driven projects with inherently niche commercial ceilings, ranging from Hazel's Southern Gothic folktale adventure to Double Fine's Keeper.
Among studio directors across Xbox Game Studios, the mood often swung between disbelief and euphoria. Sears recalled fellow creative leads asking one another how they had gotten so lucky and whether they were living through a true golden era of patronage. While peers celebrated the hands-off generosity, Sears admitted he remained privately anxious, reminding colleagues that there is always a night when Rome burns.
"I literally told people, 'Yeah, this could be terrible.' Because somebody is going to say one day, 'The money tap, we're closing those floodgates.' And that's going to have really traumatic results downstream."
A Brutally Honest Admission: "Yeah, Probably"
When interviewer Ben Hanson summarized Sears' position, asking if he was deeply grateful Microsoft supported South of Midnight while simultaneously believing he would not have greenlit that level of funding if he were in charge of Xbox's purse strings, Sears did not hesitate: "Yeah, probably."
He immediately clarified the human paradox behind that statement. He desperately wanted to build South of Midnight and joked that he certainly was not selfless enough to turn off his own studio's funding tap before someone else's. However, looking at the numbers objectively, bankrolling niche creative visions without strict commercial guardrails made a harsh corporate reckoning inevitable once Microsoft's top brass demanded profitability. That exact executive turbulence has persisted at the very top of the division, most recently highlighted by Helen Chiang's abrupt departure after just 90 days as Xbox COO.
How Compulsion Games Escaped the Fallout Through Independence
Sears' downstream warning materialized in full force following Microsoft's $69 billion acquisition of Activision Blizzard. Under intense pressure from corporate headquarters to boost profit margins, Xbox abruptly slammed the floodgates shut, shuttering studios, canceling projects, and laying off thousands of employees across multiple restructuring waves, even as select narrative bets like inXile's time-bending RPG Clockwork Revolution continued toward their 2027 window.
Unlike studios that were dissolved during the correction, Compulsion Games managed to engineer its own escape. In August 2026, studio head Guillaume Provost and the management team completed a buyout to separate from Microsoft and regain full independence. Crucially, the Montreal developer retained complete publishing and intellectual property rights to its entire catalog, including Contrast, We Happy Few, and South of Midnight, ensuring that ongoing store sales now flow directly back to the independent team.
My Take
When a first-party creative director calmly admits that he wouldn't have funded his own game if he were running Xbox, it tells you everything you need to know about Microsoft's management between 2018 and 2024. For five straight years, I watched leadership hand out blank checks with zero commercial oversight just to pad the Game Pass library. Then, the moment the $69 billion Activision Blizzard bill came due in Redmond, executives panicked, shut off the tap overnight, and laid off thousands of developers to fix their own lack of planning. Guillaume Provost and Compulsion Games pulled off a masterstroke by buying back their independence and keeping their IP before the axe could fall on Montreal.
SEO consultant for over 20 years and digital entrepreneur, Charles "Grimtag" is the founder of Pro-Gamer.gg, Retrocharting.com, and Gamescharting.com. A competitive gamer, streamer, and retro game collector, he has worked in the video game industry for over 15 years, notably as a consultant for leading game price comparison platforms. Passionate about real-time performance data and gaming technology, he analyzes competitive esports, gaming hardware benchmarks, and creator workflows on Pro-Gamer.gg with an authentic player perspective.
