Xbox spin-off Double Fine cuts 23 jobs weeks after divestment
Developed over time first seen 3 months ago
Double Fine, the studio behind Psychonauts 2, Keeper and Kiln, has laid off 23 developers, just weeks after Microsoft's Xbox division divested the company as part of a wider restructuring. Founder Tim Schafer said the cuts were necessary for the studio's survival as it adjusts to becoming a self-sustaining independent company again, calling the decision painful for a small, close-knit team. Double Fine is the first of four studios recently spun off by Xbox to announce layoffs publicly, underlining the tough conditions facing mid-size developers across the games industry.
Double Fine, founded in 2000 by former LucasArts staff, built its reputation with quirky titles including Psychonauts, Brutal Legend and Broken Age before Xbox acquired it in 2019 during the troubled development of Psychonauts 2, which went on to earn a Game of the Year nomination. According to Bloomberg's Jason Schreier, who first reported the layoffs, the studio employed around 90 people at the time of the cuts. The divestment, announced by Xbox CEO Asha Sharma alongside similar moves for Compulsion Games, Ninja Theory and Undead Labs, came shortly after Double Fine's staff unionised and released the pottery-themed multiplayer game Kiln, which failed to gain much traction. Double Fine says it remains committed to supporting the affected staff as it transitions to independence.
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In short
- Double Fine cuts 23 jobs weeks after Xbox divestment
- Founder Tim Schafer cites need for studio's survival
- First of four spun-off Xbox studios to announce layoffs
How this story developed
- 3 months ago Double Fine issued a fuller statement, with the studio pledging to remain "committed to supporting each affected person as best as we can" as it adjusts to life outside Xbox.
- 3 months ago Fresh reporting filled out Double Fine's history under Xbox, noting Psychonauts 2's troubled development ultimately earned a Game of the Year nomination after Microsoft acquired the studio in 2019.
- 3 months ago Double Fine has laid off 23 developers just weeks after Xbox divested the studio, with founder Tim Schafer calling the cuts a painful but necessary step towards becoming self-sustaining again.
Explained simply
Double Fine is a video game development studio best known for offbeat, story-driven titles such as Psychonauts, Brutal Legend and Broken Age. Founded in 2000 by Tim Schafer, a veteran designer from LucasArts, it built a loyal following before being bought by Microsoft's Xbox division in 2019, becoming part of the company's in-house games business.
Earlier this year, Xbox announced it was splitting off several of its studios, including Double Fine, Compulsion Games, Ninja Theory and Undead Labs, so they could operate as independent companies again rather than being owned directly by Microsoft. Xbox's leadership said it made sense to step back from owning every studio, even ones it valued creatively.
This move matters because it reflects wider financial pressure across the video games industry, where large companies have been scaling back and studios of Double Fine's size are having to adjust to standing on their own again without a big parent company's backing. Double Fine's situation is being watched as an early sign of how the other newly independent studios might fare in the months ahead.
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Originally published by Polygon as “Double Fine lays off 23 after leaving Xbox Game Studios”.