South of Midnight director says Xbox funding was unsustainable

David Sears, the creative director of South of Midnight, stated during an interview that he probably would have declined to greenlight such a massive project while heading Xbox. Sears said that in hindsight, the extensive funding provided by Xbox for games and studios appeared unsustainable. He stated he did not want the responsibility of a giant budget or a team of 600 people, noting he would have chosen to axe a different game first.

South of Midnight · official art via IGDB

Sears said he worried Xbox would eventually abruptly cut off funding. He left developer Compulsion Games in 2025, shortly after the game launched in April 2025 on PC, Xbox Series X|S, PlayStation 5, and Nintendo Switch 2. Following a series of cuts in July, Microsoft severed ties with multiple development houses, such as Compulsion Games, Double Fine, Undead Labs, and Ninja Theory. Compulsion transitioned into an independent studio and retained the intellectual property rights for South of Midnight. Double Fine head Tim Schafer reportedly expressed a similar cautious view recently.