Double Fine Productions has announced layoffs after separating from Xbox, according to Game Informer. The studio, best known for Psychonauts, was one of five teams spun off as part of Xbox’s broader restructuring.
While Double Fine was not shut down, the change in ownership structure still led to job cuts. Studio head Tim Schafer described the decision as a painful one and indicated it was made only because the company believed it was necessary for the studio’s survival.
The update places Double Fine among the developers affected by Microsoft’s ongoing changes to its gaming business. In this case, the studio appears to have avoided closure, but the split from Xbox still created enough pressure to force internal reductions.
For fans of Double Fine and Psychonauts, the announcement underscores how deeply the current games industry reset is being felt. Even studios that remain operating are facing difficult choices as publishers and developers adjust to restructuring and long-term financial realities.
