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Psychonauts developer Double Fine has responded to the reports of its potential closure with a single emoji.
The San Francisco studio is one of a number of Microsoft-owned developers reportedly fighting for their future amid a significant shakeup at Xbox that is expected to result in layoffs across the gaming business later this month. Hellblade developer Ninja Theory, which announced its new game Senua at Xbox Games Showcase just over a week ago, and South of Midnight maker Compulsion are also reportedly in negotiations with Microsoft over a potential buyout in a bid to avoid closure.
Tim Schafer’s Double Fine is perhaps most famous for the Psychonauts franchise. Microsoft bought the studio in June 2019 and signed on as Psychonauts 2 publisher. Double Fine then released Keeper in 2025 and Kiln earlier this year, both of which were not commercial hits.
Yesterday, The Game Business reported that Xbox Game Studios boss Craig Duncan had stepped down. News of various Microsoft studios potentially closing down was not far behind. IGN has asked Microsoft for comment but it is yet to respond.
Double Fine did issue a single emoji social media post, summing up how it feels right now: a
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