Tim Schafer, game designer and founder of Psychonauts developer Double Fine, gave a strong response after Xbox divested the studio as part of its massive restructuring efforts this summer.

Speaking with Bloomberg’s Jason Schreier in a September 2026 interview, Schafer admitted that he knew something was up before Xbox’s divestment was officially announced — but he wasn’t about to go down without a fight.

“You’re like, ‘Wait a second, we’re not going out like this,'” Schafer explained. “Some people said, ‘I’m checking out, this is one too many battles for me.’ But for the rest of us, it’s like a creative awakening.”

“No one puts Double Fine out of business except for me,” he continued. “Asha’s not going to shoot my dog. I’m going to shoot it. But I’m not going to shoot it, because it’s going to do great. A lot of people want to walk the dog.”

Thankfully, Double Fine was able to retain its intellectual property and become fully independent, though it did have to lay off a quarter of its staff as a result of this change. That isn’t stopping it from making more games, though, as the developer recently published a Kickstarter for its next project — with the addendum that if it raises $100 million, they’ll also make Brutal Legend 2.

“We’ve been through a lot this year,” Schafer told Schreier. “A lot of it is very soul-sucking stuff. Inner conflict, threats of extermination, long negotiations, strenuous hard tradeoffs with lawyers. Tons of demoralizing stuff.”

And yet, in spite of these challenges, Schafer says he’s been able to find a creative spark that has invigorated both himself and the remaining team at Double Fine.

“This is the good fight. Can we think of a great idea for a game that we can actually do for the right budget, that can get to this publisher who’s interested in these types of games? This kind of problem-solving is soul-enriching. Using creativity to solve problems is what gets us up in the morning. So it is hard, and it is scary and it is stressful, but it’s at least putting some fire back into the bellies of the team and me,” he said.

Xbox has undergone a slew of major changes as CEO Asha Sharma works to make the company profitable again. Shedding Double Fine was part of that change, as well as massive layoffs that affected roughly 3,200 employees.

Sharma has been fairly transparent with Xbox’s financial state and future plans, most recently telling the BBC that the brand’s next generation console, Project Helix, will include a “family of devices,” though she notably declined to comment if it’ll have a disc drive or not.

In other Double Fine news, the developer shadow dropped Keeper, a formerly Xbox-exclusive title, on PlayStation 5 today now that it’s no longer tied to the company.

Virginia (she/her) is IGN’s News Editor. With ten years of experience reporting on games and entertainment, she’s got a storied background in the fighting game community, influencer news, and viral online trends. Find her on Twitter at @TheeMissGlaze.