Double Fine Productions is officially independent from Microsoft and has regained the publishing rights and intellectual property for all its games released under the tech giant, including Psychonauts 2. Alongside the split, the studio announced a Kickstarter campaign for a new game jam while confirming that a recent unionization effort has been withdrawn.
Independence and IP Return for Double Fine Productions
Psychonauts and Brutal Legend developer Double Fine Productions has confirmed that it now officially owns the intellectual property and publishing rights for all games released during its tenure under Microsoft. The studio, which also developed Keeper and Kiln, completed its separation from Xbox following a massive restructuring across Microsoft’s gaming division.
Studio CEO Tim Schafer addressed the transition during an appearance on Kinda Funny Games Daily, clarifying that sales of titles like Psychonauts 2 directly support the independent studio once again. While some titles may temporarily still display Microsoft’s name in digital storefronts due to administrative processing delays, the revenue streams have reverted to the developer.
Everything, we got back, the transfer of the IP came back to us,
he said. “All, we have the publishing rights back to our games. It still says ‘Microsoft’ on some of them, but it just takes a while for it all to process. When people buy our games, it supports the studio. So if you’re curious, buying any of our games helps support the studio, and we can turn that money into revenue that helps us extend that runway.”
Tim Schafer, CEO
Double Fine director of marketing and communications James Spafford also confirmed Double Fine’s independence to Aftermath, stating, I can confirm that we are officially independent, the deal is closed, and buying our games now directly supports us just the same as Compulsion.
Another studio affected by the broader Xbox restructuring, Compulsion Games, similarly retained ownership of its catalog and its self-published title South of Midnight. Xbox CEO Asha Sharma promised that Double Fine and South of Midnight developer Compulsion Games would retain their IP, catalog, and a runway for their next games
when they were listed as part of a grand restructuring plan early last month. The move, which also laid the groundwork for 3,200 layoffs across Xbox teams, gave the Psychonauts studio an out amid troubles at Microsoft’s gaming division but left its long-term future uncertain.
Reviving Amnesia Fortnight and Extending Financial Runway
To secure immediate operational funding following layoffs that accompanied its departure from Microsoft, Double Fine brought back its internal game jam, Amnesia Fortnight, via a new Kickstarter campaign. The crowdfunding effort, paired with documentary coverage from 2 Player Productions, goes live on August 31 and is scheduled to run through most of September.
We're going to do a Game Jam, live on the internet, in which our backers will get to choose which of our myriad of ideas get made into four new prototypes—and which of those final four will become a real (small) game,
reads the Kickstarter page. You may even snag some sweet merchables and rarities along the way.
Tim Schafer, CEO
Backers will vote on various studio ideas to determine which concepts move to prototyping, with one eventually developing into a real (small) game. In parallel, the studio continues to update its 2026 pottery-based multiplayer release Kiln, introducing new maps, game modes, and a price reduction.
Withdrawn Union Petition Amid Staff Reductions
The transition back to independence involved significant workforce changes, including layoffs affecting 23 members of its staff not long after announcing that it would be regaining its independence from Microsoft in July. Meanwhile, an organizing effort by employees that began in early May has ended.
According to the Communications Workers of America, the union that has helped thousands of Microsoft game workers organize, workers withdrew their National Labor Relations Board petition just a couple weeks after filing it, covering what was originally a total of 42 regular full-time and part-time employees—well ahead of both the studio’s independence deal and the subsequent layoffs. The union did not elaborate as to why, with a CWA spokesperson stating, Beyond that, we don't have any updates.
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