Following Microsoft's decision to part ways with four studios in July 2026—including Double Fine, Compulsion Games, Ninja Theory, and Undead Labs—two of those developers have officially confirmed their independence and outlined their paths forward.

Quick Facts

  • Double Fine and Compulsion Games have completed their separation from Microsoft.
  • Double Fine's Tim Schafer confirmed the studio gets publishing rights back to all its games, though Xbox Game Studios may still appear as publisher temporarily while processing takes place.
  • Compulsion Games CEO Guillaume Provost confirmed a management buyout to reacquire the studio's IP from Microsoft.

Double Fine Plans and Game Updates

Double Fine's Tim Schafer appeared on an episode of the Kinda Funny Games podcast to discuss the studio's new status. While purchases of Double Fine games now directly support the studio instead of Microsoft, Schafer noted that processing the publishing rights transition will take time.

Double Fine also launched a Game Jam, Documentary, and Kickstarter campaign called Amnesia Fortnight 2026: Indie Reboot, where backers vote on four new prototypes to determine which becomes an official game. Meanwhile, the game Kiln will continue receiving new maps and modes, and the studio is working on other unannounced projects.

Double Fine issued a public service announcement noting that Kiln and Keeper are receiving permanent price changes, Steam games are getting international price adjustments, and Psychonauts 2 is getting a sale for its anniversary.

Compulsion Games Management Buyout

Compulsion Games CEO Guillaume Provost spoke to GamesBeat, confirming that the studio is reacquiring its intellectual property from Microsoft through a management buyout. Provost described the exit as gracious on Microsoft's part following the initial job cuts announced on July 6.

The South of Midnight developer plans to continue creating narrative-focused titles, though Provost emphasized that the team is taking things slow to ensure future success.

What Remains Unknown

While Double Fine and Compulsion Games have detailed their separation and immediate next steps, formal independent plans for the remaining affected developers—Ninja Theory, Undead Labs, and Arkane—have not yet been detailed.