Double Fine Owns Its Entire Catalogue After Xbox Split — Buying Their Games Now Supports the Studio

“Everything we got back, the transfer of the IP came back to us, and we got the publishing rights back for all our games.” Those words came from Tim Schafer, CEO of Double Fine Productions, speaking on the Kinda Funny podcast this week — and for fans of Psychonauts, Brütal Legend, Keeper, and Kiln, they carry real weight.

The Psychonauts studio is now fully independent after separating from Xbox Game Studios in July 2026, and the confirmation from Schafer is the first detailed account of exactly what the studio walked away with. Short answer: everything.

The IP Came Back — All of It

Every game Double Fine made during its seven years under Microsoft — Psychonauts 2, Keeper, Kiln, and every earlier title released through the Xbox publishing umbrella — is now owned outright by the team that created it. The IP transferred back along with full publishing rights, meaning the studio earns all revenue when anyone buys those games directly.

“When people buy our games it helps support the studio,” Schafer said. Steam still lists Xbox Game Studios as the publisher on titles like Psychonauts 2 and Keeper — but Schafer explained that’s simply a processing delay rather than a meaningful distinction. “It takes a while for all of that to process,” he said. The underlying financial arrangement is already in place.

Xbox CEO Asha Sharma had made a public commitment when the split was announced: that both Double Fine and fellow departee Compulsion Games — the South of Midnight and We Happy Few studio — would retain their IP, their catalogues, and a “runway for their next games.” Schafer’s podcast comments confirm that pledge was honoured in full. One caveat: Microsoft may still be listed as the formal owner on “some of them,” but Schafer says that will change over time as records update.

Why Buying Their Games Now Makes a Difference

The practical upshot is direct: if you’ve been meaning to play Psychonauts 2 or pick up Keeper, doing so now means your money goes straight to an independent studio rather than through a Microsoft publishing arrangement. This matters more than it might seem. Double Fine laid off 23 of its roughly 90 employees during the transition — “Only the survival of our studio would ever make us consider such a painful action,” Schafer said at the time — and the studio is now operating on a leaner footing as a genuinely independent outfit.

Compulsion Games finds itself in a similar position. The We Happy Few and South of Midnight developers retained ownership of both franchises, giving them full creative and commercial control over any future entries, whether self-published or through a new partner.

A Rare Positive Outcome From the Xbox Restructuring

The July 2026 Xbox restructuring cut more than 3,200 roles across Microsoft’s gaming operations. Some studios were closed outright. Others, like id Software, absorbed heavy layoffs while remaining inside the corporate structure. Double Fine and Compulsion Games negotiated a third path: independence with their catalogues intact — an arrangement that Schafer himself acknowledged required goodwill from both sides.

The studio’s statement at the time read: “We’re thankful to everyone at Xbox for seven years together, and for working with us to reach an outcome which preserves our history and culture, and returns ownership of our games to us.” That tone — thankful rather than resentful — suggests a separation that was, by industry standards, handled with unusual care.

With Psychonauts, Keeper, and Kiln back under their creative control, the team now has the runway to decide what comes next entirely on their own terms. Whether that means a Psychonauts 3, a return to Brütal Legend, something entirely new, or a combination of all three, no corporate approval is required. For a studio that spent seven years as part of one of the world’s largest gaming companies, that freedom is a meaningful change.