Double Fine posts emoji amid reports Xbox may close studio

Double Fine posted a single smiling face with a bead of sweat emoji on its BlueSky and X account after reports said Microsoft plans to close the studio as part of cost cuts at Xbox. The emoji was the studio’s only public response to the reports.

The reports, published in mid-June, identified Double Fine alongside Compulsion Games and Ninja Theory as studios negotiating with Microsoft to break away and become independent. Those reports said that even if a studio separates from Microsoft, significant layoffs could still occur.

On June 10, Xbox leaders Asha Sharma, CEO, and Matt Booty, chief content officer, sent an open letter to staff saying the division needed to “reset the business.” Microsoft CEO Satya Nadella has said Xbox must become a sustainable business and that monetization of its products needs to improve. Reporting also indicates that Head of Xbox Game Studios Craig Duncan and chief of staff Louise O’Connor are leaving the business.

Double Fine, founded by Tim Schafer, is known for titles including Psychonauts and Kiln. The studio joined Xbox Game Studios in prior years. A closure or separation would change the studio’s relationship with Microsoft and its place within the larger Xbox organization.

Microsoft has not publicly confirmed the closure of any studio. Compulsion Games and Ninja Theory have not issued public statements; Double Fine’s single emoji remains the only visible reaction from the studios named. Further details are expected as negotiations continue and as companies update staff and the public.