David Sears, the creative director of South of Midnight, said in an interview that, in hindsight, he probably would not have approved the game’s funding if he had been making the investment decision with his own money. Sears also made clear that he wanted to create the game and appreciated Microsoft’s support. His comments have renewed discussion about Xbox’s past approach to funding expensive projects and the risks publishers take when they support games that may deliver cultural or reputational value without generating large commercial returns.
Kotaku reported on November 2 that Sears discussed the project with MinnMax host Ben Hanson. Hanson summarized the position as a question: Sears was grateful that Microsoft had strongly supported South of Midnight, but would he have funded it himself if he were making the decision? Sears answered, “Yeah, probably.”
The exchange was framed as a hypothetical about investment judgment. It was not a statement that Sears regretted making the game or did not believe in the creative work. He went on to say that he wanted to make it and that he was not completely selfless. In his words, he might have turned off someone else’s funding earlier if he had been responsible for the money.
Sears also described concerns he said he had raised during development. He recalled warning colleagues that someone might eventually decide to close the funding tap, with serious consequences for teams downstream. He said other directors had asked whether the industry was experiencing a golden era of game funding. His usual response, as he remembered it, was that the situation was temporary.
The comments describe his retrospective view of the funding environment. They do not show that he predicted the exact timing or details of Microsoft’s later organizational changes. Rather, he was expressing concern that a model built around substantial publisher support could eventually become financially unsustainable.
South of Midnight was developed by Compulsion Games. Kotaku reported that the studio was previously part of Xbox Game Studios and later became independent as part of Microsoft’s restructuring, taking its intellectual property with it. Insider Gaming reported on November 3 that Sears had left Compulsion and was working as creative director at game-development support studio Orphan Toyz LLC.
The available reports do not establish whether Compulsion has signed a new project or how much financial runway the independent studio has. Those details remain undisclosed. The studio’s change in status is relevant to Sears’ remarks, but it should not be confused with a confirmed announcement that the company has closed or that the game’s intellectual property has been sold.
Sears discussed South of Midnight alongside Double Fine’s Keeper as examples of projects Microsoft supported despite expectations that they might not generate large amounts of money. He said such projects could increase Xbox’s prestige or become cultural touchstones. Those remarks are his description of the investment rationale, not audited financial disclosures.
The interview does not provide the development budget, sales total, profit or loss for South of Midnight. It therefore does not support a precise calculation of the game’s commercial performance. Sears’ comment is better understood as a reflection on how a publisher weighs creative ambition, brand value and financial return.
Sears said that, looking back, the funding approach seemed unsustainable. He also praised Microsoft for allowing studios to become independent rather than simply shutting them down, describing the company as more humane than the one he remembered from the 1990s.
His remarks highlight a tension in the economics of game development: publishers may fund projects for reasons beyond immediate sales, but that support can become vulnerable when budgets rise or corporate priorities change. The interview does not establish Microsoft’s official rationale for every restructuring decision, nor does it provide internal financial data. Sears’ comments remain an individual account of the risks he perceived while making the game.