Double Fine has been hit in the latest round of XBOX layoffs, and the studio is now going independent.
There was a report last month that stated that studios under the XBOX Game Studios banner: Double Fine, Ninja Theory, and Compulsion were facing a shutdown; Double Fine was reportedly negotiating to stay afloat. Now, the studio’s official statement has arrived, providing clarity on the situation.
Double Fine Will Now Operate Independently
A report by Windows Central has revealed that XBOX is undergoing the most significant restructuring in the company’s history. The team has made the decision to reduce the team by “approximately 3,200 throughout FY27”. During these cuts, four studios will go independent or seek new management to avoid closure. Double Fine Studios will return to management of its IPs and transition to an independent studio, led by Tim Schafer.
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Double Fine was founded by Tim Schafer and some of his colleagues from LucasArts. The studio’s first project, Psychonauts, was released for PC, PS2, and Xbox in 2005. Since then, the developers have actively released new projects almost every year. The latest titles include Psychonauts 2 in 2021, Keeper in 2025, and Kiln in 2026.
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For more information from Insider Gaming, read about the Lords of the Fallen CEO stating studios earn twice as much from digital sales. Don’t forget to sign up for our weekly newsletter.
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