Double Fine founder Tim Schafer says he no longer understands the economics of making video games, pointing to years of sustained layoffs and studio closures that have reshaped the industry even as players continue to spend money on games.
In a video interview with the BBC, Schafer described an industry that has defied the familiar boom-and-bust cycle he once expected. «I don't understand the economics of making games to be honest,» Schafer said. «I often for years thought I understood them, because there are layoffs, which is bad, and then the people who make games realize, 'Oh, we need people to make games.'»
He recalled assuming the business would follow a predictable pattern of ups and downs, with companies cutting staff and then rehiring when the need for developers returned. Instead, he said, the downturn has persisted for roughly four years without a clear explanation. «But it's been down for like, four years, and I don't know why,» Schafer said. «I really don't, because people are playing games, and people are making money, so I don't know why there's a big loss of jobs. I just assume it's, like, someone is being greedy somewhere. But I hope it is a cycle, and I hope it bounces back.»
Schafer's comments come amid a broad restructuring at Xbox, one of the largest publishers and console makers in the business. The company has planned thousands of layoffs and has divested several game studios, which have been forced to downsize after becoming independent. Double Fine was among the studios that separated from Xbox as part of that internal shuffle.
Even successful releases have not shielded developers from cuts. Staff who worked on Battlefield 6, which launched to strong reviews and financial success, were laid off after shipping the game. The layoffs at Xbox are expected to continue as the company reorganizes, with the most recent round affecting Halo Studios. Activision is now leading development on the next Halo game, while Halo Studios has been reassigned to other franchise duties.
Schafer has been candid about the pressure on Double Fine since its divestment from Xbox. He previously told Bloomberg that keeping the studio afloat amounted to a «creative awakening» rather than a reason to fold. «No one puts Double Fine out of business except for me,» he said. «[Xbox CEO Asha Sharma'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.»
Despite the turmoil, Schafer said the industry still contains significant creative energy, particularly among independent developers. He rejected the idea that only indie games are creative, noting that many large-budget titles also do strong creative work. But he described AAA development as a more volatile and stressful environment, where workers can be laid off as soon as a project is finished. Indie studios, he added, face a different risk: running out of money after a game ships.
The layoffs and closures have raised questions about how major publishers allocate resources at a time when the audience for games remains large and revenue across the sector continues to grow. Schafer's remarks reflect a wider unease among developers who say the current downturn cannot be explained by consumer demand alone. For now, he said, he hopes the cycle eventually turns, even if the reasons behind the prolonged slump remain unclear.