Chris Kerr,

Senior Editor, News,GameDeveloper.com

July 29, 2026

1 Min Read

Double Fine has laid off 23 members of staff after regaining its independence from Xbox maker Microsoft. Studio boss Tim Schafer confirmed the news in a statement on Bluesky.

"As a small, tightly-knit team, these actions are not taken lightly. Only the survival of our studio would ever make us consider such a painful action. Our transition to becoming an independent company also means becoming a size that we can sustain," wrote Schafer.

"The people we are losing were all important. They all made an impact on our games and culture and they will be missed. We are committed to supporting each affected person as best as we can, and we thank them for their hard work and commitment to the creative spirit we cherish here at Double Fine."

Double Fine was acquired by Microsoft in 2019 and has released multiple titles under the Xbox Game Studios banner including Psychonauts 2, Keeper, and Kiln.

Earlier this month, however, Microsoft confirmed it was severing ties with Double Fine (and other studios)—paving the way for the company to return to independence. In what Microsoft described as the "most significant restructure in Xbox history," the U.S. tech giant also outlined plans to eliminate 3,200 roles across its video game division by the end of the current fiscal year—including major cuts at notable studios such as id Software, ZeniMax Online Studios, and Obsidian.

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The move sparked widespread protests outside multiple Xbox studios, with unions organizing 'Save Our Devs' rallies on July 15. Microsoft is also facing legal action from labor unions in the U.S. and Canada for allegedly mishandling the layoffs.

Game Developer has reached out to Double Fine for more information.

About the Author

Chris Kerr

Senior Editor, News, GameDeveloper.com

Game Developer news editor Chris Kerr is an award-winning reporter with over a decade of experience in the game industry. His byline has appeared in notable print and digital publications including Edge, Stuff, Wireframe, International Business Times, and PocketGamer.biz. Throughout his career, Chris has covered major industry events including GDC, PAX Australia, Gamescom, Paris Games Week, and Develop Brighton.