South of Midnight: director says Xbox funding was unsustainable

David Sears, director of South of Midnight, has questioned how Xbox funded smaller, riskier games. In an interview with Minnmax, he said the company backed many titles and studios, and he treated the money as effectively endless. He added that he did not want the burden of a giant budget or responsibility for a team of 600. Sears called the support commendable but said it could not last forever. He expected the funding to stop at some point.

Sears said he was always worried that South of Midnight could lose its funding. He told people the situation could turn bad, because someone would eventually shut the flow off. Asked directly, he said he probably would have done the same if he ran Xbox. He described himself as not completely selfless and said he would have stopped someone else's funding before South of Midnight. In hindsight he called the approach unsustainable.

There are no official sales figures for South of Midnight. An estimate from Alinea in April 2026 put the PS5 version at about 16,000 copies. Steam player counts also look weak, according to the report. Sears's own remarks in the interview suggest the game did not reach its target. The studio had already returned to independence earlier in the year, after time under Microsoft.

Xbox once funded games of many sizes to fill Game Pass, an approach led by former CEO Phil Spencer. According to the report, that approach no longer appears to be in place. His replacement, Asha Sharma, has made deep cuts to get the business back on track. Sears's comments land against that backdrop, with the funding model he described now under pressure. The interview was published by Minnmax, with the report citing YouTube and Video Games Chronicle.

Sears's account is his own view of how the money worked, not a confirmed company policy. The sales estimate for the PS5 version is an analyst figure, not an official number. No new release date or price is attached to these comments. The funding picture should be treated as reported, not settled.