In the ideological battle for the soul of video games, South of Midnight (out April 8) is the stop-motion heart beating a strange, staccato rhythm at its center.

The upcoming third-person action-adventure title from Montreal-based studio Compulsion Games (We Happy Few, Contrast) challenges Roger Ebert’s infamous “video games will never be art” take on almost every front. It’s a magical, lovingly hand-crafted world nestled within a rarely mined locale, featuring an effervescent protagonist, a stirring soundtrack, and a vibrant cast of mythical creatures and colorful Deep South personalities.

While not groundbreaking,...