Oof. Big oof. Reports surfaced on June 15 claiming that Double Fine - the beloved studio behind the Psychonauts series - is one of three Xbox-affiliated studios facing the axe as Microsoft continues its ongoing cost-cutting spree, according to PC Games N.
Double Fine, the quirky San Francisco dev team that Tim Schafer built into an industry darling, has now officially responded to the swirling rumors. While the studio hasn't handed out a clean bill of health, they've at least broken their silence rather than letting the internet spiral into full-on panic mode - which, let's be honest, was already happening at max speed.
This news hits particularly hard for fans who watched Microsoft acquire Double Fine back in 2019 with what felt like a warm, hopeful hug from Xbox. Psychonauts 2 launched to critical acclaim in 2021, so watching the studio potentially get yeeted into the void despite delivering a genuine masterpiece feels like losing a boss fight on your last life with no checkpoints in sight.
Microsoft has been on a serious studio-closure streak lately, having already shut down Redfall developer Arkane Austin and Hi-Fi Rush studio Tango Gameworks in 2024 - studios that, by all accounts, were actually making good games. If Xbox is playing a roguelike where the goal is to delete all the interesting talent on your roster, they're doing a speedrun of it.
The broader Xbox cuts signal a major strategic shift for Microsoft's gaming division, and the gaming community is not exactly thrilled about watching storied developers disappear into the corporate void one by one. Whether Double Fine makes it through this particular gauntlet remains to be seen, but the vibes right now are decidedly not good.
We'll be watching this one very closely. Fingers crossed Raz gets to keep his psychic powers - and more importantly, that the people who made him exist still have jobs.
