South of Midnight Director Reflects on Why He Was ‘Always Worried’ About Funding at Xbox

We absolutely loved South of Midnight when it launched last year as an Xbox first-party title from Compulsion Juegos, and it’s still one of our favourite Xbox Game Studios releases of recent years. However, a year later, Xbox has parted ways with the development team and helped transition them back to an independent studio.

In a nutshell, it seems Xbox wasn’t happy enough with South of Midnight’s performance from a revenue standpoint, and the same could be said for other smaller releases last year like Double Fine’s Keeper and Kiln.

Some fans had been voicing their concerns prior to these releases that Xbox might be putting too much funding into them, and speaking on a recent podcast, South of Midnight director David Sears admitted that he was “always worried” that the funding situation might change and cause Xbox to “close the floodgates”.

Here’s an excerpt from the MinnMax podcast in which he said this:

“I mean, [Xbox] were funding a lot of games. They were also funding a lot of studios that, you know, I was like, well, okay, great. I guess you have infinite money. Like I was saying earlier, I don’t want to feel the weight of the obligation of giant budget or an army of 600 to be responsible for. I want to make something that isn’t going to bankrupt Microsoft, I guess, or the games division.”

“So, you know, on one hand, if everyone you’re working with is either trying to make generational games at not a huge expense, or games that have huge or really significant contemporary commercial appeal, great. It’s going to work. But when does that ever happen?”

“I literally told people, ‘Wow, this could be terrible.’ Because somebody is going to say one day, ‘We’re closing those floodgates.’ And that’s going to have really traumatic results downstream.”

“I mean, [Xbox] were funding a lot of games. They were also funding a lot of studios that, you know, I was like, well, okay, great. I guess you have infinite money. Like I was saying earlier, I don’t want to feel the weight of the obligation of giant budget or an army of 600 to be responsible for. I want to make something that isn’t going to bankrupt Microsoft, I guess, or the games division.”

“So, you know, on one hand, if everyone you’re working with is either trying to make generational games at not a huge expense, or games that have huge or really significant contemporary commercial appeal, great. It’s going to work. But when does that ever happen?”

“I literally told people, ‘Wow, this could be terrible.’ Because somebody is going to say one day, ‘We’re closing those floodgates.’ And that’s going to have really traumatic results downstream.”

Perhaps most shockingly, the director went on to admit that as much as he wanted to make South of Midnight, it perhaps wasn’t sustainable from a funding perspective in hindsight, and that a “shocking outcome” seemed inevitable.

“I mean, I wanted to make it. No doubt, and obviously, because we made it. Would I have turned off someone else’s money flow before South of Midnight? Yeah, ’cause I’m not completely selfless. But it just seems like, in hindsight at least, it was unsustainable. So, of course it was going to have a shocking outcome.”

“I mean, it’s easy to dissect it now. At the time, I would talk to other directors and would be like, ‘How is this happening? How did we get so lucky? Is this a golden era?’ And I would always be like, ‘For now, right? There’s always a night when Rome burns.’ And I didn’t know exactly when it would be, but I was always worried about it.”

“I mean, I wanted to make it. No doubt, and obviously, because we made it. Would I have turned off someone else’s money flow before South of Midnight? Yeah, ’cause I’m not completely selfless. But it just seems like, in hindsight at least, it was unsustainable. So, of course it was going to have a shocking outcome.”

“I mean, it’s easy to dissect it now. At the time, I would talk to other directors and would be like, ‘How is this happening? How did we get so lucky? Is this a golden era?’ And I would always be like, ‘For now, right? There’s always a night when Rome burns.’ And I didn’t know exactly when it would be, but I was always worried about it.”

Of course, none of this is to suggest that Sears wasn’t proud of South of Midnight, or that he didn’t think it was worthwhile, but it just appears he was concerned with the Xbox money was putting into (and expecting back) for it.

Nevertheless, it seems like he had a very positive experience working with Microsoft overall:

“To their credit, it’s amazing, right? I think there’s definitely corporate Microsoft DNA but they’re vastly different from the Microsoft I knew back in the ’90s or the early 2000s, right? Much more humane, actually. It’s remarkable and commendable.”

“Working on South of Midnight, it became clear to me – some games, their time is not on release. Some games are generational, right? Something that has a good message or is transportive to places that will remain timeless will endure and audiences will find them.”

“To their credit, it’s amazing, right? I think there’s definitely corporate Microsoft DNA but they’re vastly different from the Microsoft I knew back in the ’90s or the early 2000s, right? Much more humane, actually. It’s remarkable and commendable.”

“Working on South of Midnight, it became clear to me – some games, their time is not on release. Some games are generational, right? Something that has a good message or is transportive to places that will remain timeless will endure and audiences will find them.”

His prediction did ultimately come true — Xbox decided to “close the floodgates” earlier this year by splitting from multiple studios including Compulsion Juegos, and seemingly adopting a new strategy of focusing on their core franchises like Halo, Forza, Gears, Fallout and others.

We’re just pleased that Compulsion Juegos didn’t end up getting closed altogether, and that South of Midnight did actually see the light of day instead of being cancelled during development. We reckon it could end up being one of those Sunset Overdrive-style titles in the future — a cult classic that people end up really enjoying from years past.

What are your thoughts on this? Let us know down in the comments section below.