Psychonauts 2 Studio Double Fine Hit With Layoffs Amid Divestiture From Xbox

Double Fine, the studio behind Psychonauts 2, laid off 23 employees during its transition out of Xbox ownership.

Xbox said Double Fine has returned to independent management, taking its IP, catalog, and funding runway with it.

The layoffs highlight how Microsoft’s wider Xbox restructuring is affecting studio staffing even as the studio regains independence.