Double Fine studio announced the layoff of 23 employees. It is estimated that this represents about a quarter of its staff.
Psychonauts 2
The developers of Psychonauts decided on the layoffs three weeks after their separation from Microsoft's gaming division. As explained by Double Fine's founder Tim Schafer, the team had to downsize to stay afloat in the current situation.
"Only the survival of our studio could compel us to make such a painful decision. Transitioning to an independent status requires us to reduce to a size that we can sustain in the long term," stated Schafer.
It's worth noting that Double Fine didn't leave XBOX empty-handed. The studio took with it its intellectual property, which it can continue to develop, as well as initial funding to get by while seeking an investor or publisher. The amount of money Microsoft provided is unknown.