Double Fine, the studio behind Psychonauts 2, has reportedly been affected by layoffs as it separates from Xbox. The move comes during a broader restructuring tied to Microsoft’s gaming business, with the studio being divested from Xbox ownership.
According to an update cited by Kotaku, an Xbox spokesperson said Double Fine had fully returned to independent management earlier in the week. The statement also indicated that the studio regained control of its intellectual property and catalog as part of the transition.
The timing has drawn attention because the Double Fine layoffs are unfolding alongside the spin-off, making the studio’s change in ownership and staffing part of the same larger shake-up. Based on the available report, the key development is that Double Fine is no longer operating under Xbox and is once again independent.
While the trimmed report does not include the full scope of the staff reductions or next steps for the company, the change marks a significant shift for one of the better-known studios tied to Xbox in recent years. For now, the clearest takeaway is that Double Fine is leaving Xbox ownership and doing so amid layoffs and wider restructuring.
