Double Fine hit with layoffs after exiting Xbox - "The people we are losing were all important" - Eurogamer.net

What the report says

Eurogamer.net reported that Double Fine Productions, the studio behind Psychonauts 2, is laying off 23 employees shortly after returning to independent status following its exit from Xbox. Studio head Tim Schafer announced the cuts on social media on 28 July, saying the decision was tied to the company’s survival and the need to become a sustainable size as an independent business.

The layoffs come after Microsoft’s Xbox division announced 3,200 job cuts and separations from four studios, according to Eurogamer’s account. Bloomberg reporter Jason Schreier was cited as saying Double Fine had about 90 employees before the reductions. Schafer said the departing workers had been important to the studio and that Double Fine would try to support those affected.

Eurogamer also cited a statement shared by Kotaku from an Xbox spokesperson, who said Double Fine had returned to independent management with its intellectual property, catalogue and development runway for future games. The exact length or strength of that runway was not disclosed in the article.

Double Fine, founded by Schafer after his LucasArts career, is known for character-driven and unusual games including Psychonauts and Psychonauts 2. During its time under Xbox, the studio released Psychonauts 2, Keeper and Kiln, according to Eurogamer. The cuts matter because they mark another consequence of wider restructuring in the games industry and raise questions about how a well-known creative studio will balance independence, staffing and future projects.