South of Midnight’s director is right about Xbox’s funding bet

David Sears, creative director on South of Midnight, says he does not think Xbox should have funded the game. In a MinnMax interview reported by Kotaku on November 2, 2026, he answered whether he would have put up the money himself with a flat “Yeah, probably” not—and that is the rare bit of plan language players usually never see until the tap closes.¹

Sears wanted the game made. Compulsion made it. South of Midnight launched in 2025, took nominations and a BAFTA, and sat beside Double Fine’s Keeper in the bucket of projects Xbox and the studios expected would not print cash but might buy prestige or lasting cultural weight.¹ During development he told people the floodgates would shut one day, with traumatic results downstream. Other directors called it a golden era. He answered, in effect, for now.¹

After Xbox’s restructuring, Compulsion spun out with its IP and an unknown runway, and has been hunting partners. Sears even calls today’s Microsoft more “humane” than the firm he knew in the 1990s because it let studios leave instead of shuttering them.¹ The studio’s prior credit was 2018’s We Happy Few with Gearbox; Microsoft bought Compulsion just ahead of that release. Whether a new project is signed remains unknown.¹

My read, as someone who counts conditions on a bill, is simple: prestige-only first-party funding is a promotional rate with a giant asterisk. Players get one striking release. They do not get a durable team, a funded sequel path, or a catalog that pays for the next risk. When the director who shipped the thing says he would have cut someone else’s money flow before greenlighting it, and labels the model unsustainable in hindsight, believe the footnote. A price that needs that many quiet conditions is not a simple price—for the platform, the studio, or the audience that assumed the shelf was permanent.

The best counterpoint is fair and real. Without Microsoft’s check, South of Midnight may never have existed. Odd, regional, award-bait work needs risk capital, and a platform holder is an obvious source. Sears is not spitting out gratitude; he is separating the joy of making the game from the business case for underwriting it forever. Awards and “cultural cornerstone” talk do not cover payroll once the floodgates close.

What would change my mind is evidence, not vibes: a clear, public mechanism showing prestige titles earned their keep through retention, long-tail play, or a sequel slate that did not depend on endless subsidy. The reporting we have does not supply that math. Until someone does, Sears has done buyers a favor by reading the terms aloud.

Who this is for: anyone who treats a first-party showcase like an unlimited plan and skips the asterisk.

Asterisk count on the old model, by the director’s own ledger: one big one—the money tap—and it was always going to come due.

Footnotes

1. Kotaku, “South Of Midnight Director Says He Doesn’t Think Xbox Should Have Funded It”. Retrieved November 3, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵