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Tim Schafer Says Double Fine Will Stay Independent After Xbox Divestment

Double Fine founder Tim Schafer discusses keeping the studio alive after Xbox's divestment, retaining its IP, layoffs, and a new Kickstarter campaign.

Tim Schafer, founder of Psychonauts developer Double Fine, has spoken publicly for the first time about the studio's separation from Xbox, describing the fight to keep the company alive as a «creative awakening» despite what he called «soul-sucking» negotiations and internal turmoil.

In an interview with Bloomberg's Jason Schreier, Schafer recalled the moment he realized Xbox was preparing to divest the studio as part of a broader restructuring effort this summer. Rather than accept the outcome quietly, he said he and his team resolved to fight for their future. «You're like, 'Wait a second, we're not going out like this,'» Schafer explained. «Some people said, 'I'm checking out, this is one too many battles for me.' But for the rest of us, it's like a creative awakening.»

Schafer's defiant stance was captured in his own words: «No one puts Double Fine out of business except for me. Asha's not going to shoot my dog. I'm going to shoot it. But I'm not going to shoot it, because it's going to do great. A lot of people want to walk the dog.» The remark was a pointed reference to Xbox CEO Asha Sharma, who has overseen a period of significant cost-cutting at the company.

The divestment, part of a larger wave of layoffs that affected roughly 3,200 Xbox employees, allowed Double Fine to retain its intellectual property and return to full independence. However, the transition was not without cost. The studio was forced to lay off a quarter of its staff as a direct result of the change. Schafer acknowledged the difficulty of the period, citing «inner conflict, threats of extermination, long negotiations, strenuous hard tradeoffs with lawyers» and «tons of demoralizing stuff» as part of the process.

Despite these challenges, Schafer says the experience has reinvigorated the remaining team. «This is the good fight. Can we think of a great idea for a game that we can actually do for the right budget, that can get to this publisher who's interested in these types of games? This kind of problem-solving is soul-enriching. Using creativity to solve problems is what gets us up in the morning. So it is hard, and it is scary and it is stressful, but it's at least putting some fire back into the bellies of the team and me,» he said.

Double Fine has already signaled its next move. The developer recently launched a Kickstarter campaign for its next project, adding a playful incentive: if the campaign raises $100 million, the studio will also produce Brutal Legend 2. The move underscores the studio's return to its independent roots, relying on direct community support rather than a corporate parent.

In a related development, Double Fine shadow dropped Keeper, a title previously exclusive to Xbox, on PlayStation 5 now that the studio is no longer tied to the platform holder. The release marks a tangible shift in the studio's new operational freedom.

The broader context of the divestment involves Xbox's ongoing efforts to improve profitability under Sharma's leadership. Sharma has been relatively open about the company's financial state and future plans, recently telling the BBC that the next-generation console, Project Helix, will include a «family of devices,» though she declined to comment on whether it will feature a disc drive.

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