Earlier this summer, Double Fine Studios faced the risk of shutting down. Now back as an independent studio, it has launched a $400,000 fundraising campaign on Kickstarter to support its next game development event. Studio founder Tim Schafer doesn't seem worn out by the turmoil. In an interview with Bloomberg, he discussed his departure from Xbox and outlined the future plans for the developer behind Psychonauts 2. Schafer said, "Some employees said, 'I can't take it anymore, this series of upheavals is just too much.' But for the rest of us, it feels more like a creative awakening."
Double Fine released the critically acclaimed but commercially unsuccessful Keeper in 2025, followed earlier this year by Kiln, a pottery-themed party game that received mediocre reviews. During Xbox's recent restructuring, the studio did not escape unscathed: the team laid off 23 employees, and Schafer acknowledged that Microsoft's initial operating reserves wouldn't last long. But now that the studio has regained its independence, it can control its own direction. While this comes with significant risks, it has also made the team's sense of creative urgency clearer and stronger.
Schafer said, "There are countless frustrating things in the game industry, most of which I can't change. It's like being the captain of a small fishing boat; worrying about whether the sea will be calm is useless. I can't do much except keep this little boat steady, trying to discern whether what lies ahead are reefs or schools of fish? Is there a business opportunity hiding over there?"
He stated that the collaboration was harmonious during their time with Xbox, but the situation clearly changed after Asha Sharma replaced Phil Spencer as the new CEO of Xbox. Schafer said, "Our previous goals were aligned, which was to deliver high-quality games for Game Pass, but then their strategy shifted. I feel that no matter how much profit we made—unless we produced a blockbuster on the scale of Minecraft that year—we couldn't escape being divested."
Although there were early signs, Xbox's decision to divest Double Fine was still quite sudden. According to Bloomberg, until early summer, Asha Sharma's plans remained unclear. Schafer struggled to get clear answers from anyone at Xbox, with some even ignoring his messages outright. However, this industry veteran didn't dwell on resentment; instead, he saw it as an opportunity to unite the team. This weekend, he is at PAX West, supporting Double Fine's booth.
Schafer admitted to Bloomberg, "No one can shut down Double Fine except me. Asha isn't going to come in and destroy my life's work; if it stops, it'll be because I chose to stop it. But I would never do that—the studio will continue to grow and thrive, and there are still many people willing to journey with us."