Hard without Microsoft's money: Double Fine lays off 23 employees after splitting from Xbox
The studio's latest game was the clay-shaping action game Kiln.
Double Fine Productions, known for the Psychonauts series, announced the layoff of 23 employees. The decision was made shortly after the team became an independent company as part of the ongoing restructuring of the Xbox gaming division.
This was announced by studio founder and head Tim Schafer in a statement published on social media. According to him, the decision was extremely difficult for the team.
As a small, close-knit team, we never make decisions like this lightly. Only the need to preserve the studio could have forced us to take such a painful step. Our transition to independent status also means we must bring the team size to a sustainable level.
Double Fine also noted that they are striving to provide maximum support to the employees affected by the layoffs during their transition to new opportunities.
Double Fine's latest game was the cooperative action game Kiln, dedicated to pottery, released in April. While working under Xbox, the studio also released Psychonauts 2 in 2021 and Keeper in 2025.
Thus, despite maintaining independence and rights to its own projects, Double Fine had to reduce its staff to adapt the studio to new working conditions without Xbox support.
Earlier this month, it became known that Microsoft spun off Double Fine and Compulsion Games (creators of South of Midnight) into independent companies. Both teams retained the rights to their intellectual properties and game catalogs.
In addition, Xbox parted ways with three other studios. Ninja Theory and Undead Labs were sold to unnamed buyers, while the future of Arkane Studios remains uncertain – the studio is undergoing a mandatory consultation procedure in France.
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