Double Fine has decided to leave Microsoft and continue as an independent studio. Tim Schafer, the company’s founder, linked the move to changes in Xbox’s strategy following Asha Sharma’s appointment to lead the division.Microsoft announced layoffs affecting a total of 3,200 people at the beginning of this year. Before that, Sharma visited Double Fine in what was described as a listening exercise, but Schafer says the signs turned negative when she began discussing a new vision for Xbox.According to Schafer, Double Fine and Microsoft shared a mission that benefited both sides: making good games for Game Pass. That direction reportedly changed, and the executive does not believe any level of profitability would have saved the studio unless it had produced a hit on the scale of Minecraft that year.The departure also comes after a difficult period for Double Fine. Despite the positive reception to Psychonauts 2, the projects Keeper, released in 2025, and Kiln, scheduled for 2026, reportedly failed to make enough of an impact to change the studio’s situation.Schafer said he holds no resentment toward the process. In his view, the games industry is full of problems beyond his control, and the priority became keeping Double Fine running, like a small boat trying to find its way across the ocean.The split nevertheless had a major effect on the team. Schafer said some people decided to leave the company after concluding that the battle was too difficult. For those who stayed, the decision represented a kind of creative awakening.Now independent, Double Fine will try to maintain its projects and structure outside Microsoft. The studio is still dealing with the aftermath of the period following Psychonauts 2, while Keeper and Kiln remain the company’s most recent projects.
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