Psychonauts 2

Double Fine's first title as a studio was Psychonauts, released in 2005. The title was considered a commercial failure, but was highly praised by critics for its characters and writing and gained a cult following. In the years following its release, fans and game journalists urged Tim Schafer, CEO of Double Fine and principal creative lead on the game, to develop a sequel to the title.[3][4]

Schafer had expressed interest in working on the Psychonauts franchise again, with the company having envisioned larger story arcs for the game's characters over the course of its development.[5][6] The development of the sequel would require a publisher that was interested in the game, and Double Fine approached publishers with the idea; Schafer said that in these pitches, he pointed out the large number of both legitimate sales through digital distribution and through the illegitimate means of software piracy.[5][7] After Double Fine's success with the concurrent development and publishing of several smaller games, such as Costume Quest and Iron Brigade, Schafer felt more comfortable about embarking on a sequel, knowing that it need not obstruct the creation of any newer properties.[8] Despite this, the publishers continued to turn down the idea. Some called the concept too creative or too obscure, according to Schafer.[5] For others, with whom Schafer said he had good relations, the deals they offered did not fit with the scale Double Fine had planned for the game.[9]

In February 2012, Markus Persson, at the time the owner of Mojang, made a public offer to fund a sequel to Schafer through Twitter.[10] Later that day, a company representative for Double Fine stated that Persson and Schafer were discussing the possibility, without further affirmation.[11] Persson noted that the anticipated costs that Double Fine would need would be an estimated $18 million, far exceeding what was initially expected to fund and cautioned fans to avoid hyping the funding possibility.[12] Persson and Schafer met at the Game Developers Conference in March 2012; no definitive plans were made for funding a sequel, however.[13] In February 2013, Persson officially stated that he was no longer directly trying to fund the sequel, commenting that he did not "have the time at the moment to even try to get educated enough to make an 18 million dollar deal", though would be open to the idea at a later time after he left game development; Persson did note other potential investors have stepped forward to help any such effort.[14]

At the 2015 Game Awards, Schafer announced Double Fine's plans to work on Psychonauts 2 using a crowdfunding campaign through Fig. The company sought $3.3 million in funding for the game, which represented approximately one-third of the planned development costs, and would augment money being put in by Double Fine and a third-party investor. Schafer noted that while the amount was the same that they had raised for their Broken Age Kickstarter, which by the time of its release had significantly overrun its budget, he felt the studio was in a better position to manage the costs and processes necessary to deliver Psychonauts 2 on schedule.[15] Schafer noted that this funding approach — bringing in money from multiple investors instead of from a single publisher — is similar to the approach taken by the movie industry, and further, that the use of crowdfunding can alleviate some of the traditional risks associated with investment, being an effective means of proving public interest in a title.[9]

Mere days after the announcement of the Psychonauts 2 campaign, Double Fine announced the development of Psychonauts in the Rhombus of Ruin, a publisher-funded virtual reality game for the PlayStation VR. The game is a smaller standalone chapter that serves as a bridge between the original game and its sequel, featuring Raz and the other psychonauts rescuing Truman Zanotto, tying into the conclusion of Psychonauts.[16]

During the campaign, Schafer confirmed that several team members who worked on the original game would return for the sequel, including Richard Horvitz and Nikki Rapp as the voices of Raz and Lili respectively, Erik Wolpaw as writer, Peter Chan and Scott Campbell as artists, and Peter McConnell as the composer.[17] Jack Black, who has worked on previous Double Fine games, will also voice in the game.[18] 2 Player Productions, a video production company who had previously worked with Double Fine to document the development of Broken Age, would be similarly documenting the creation of Psychonauts 2.[19] Double Fine planned to utilise Unreal Engine 4 to develop the sequel, allowing them to save time and money that would otherwise be spent developing a custom game engine, as they had done in the past.[20]

The campaign reached its target funding goal with five days left in its 38-day campaign.[21] Upon completion, a total of $3,829,024 had been raised from 24,109 backers, with about $1,874,000 (48%) coming from those who opted to invest in the game compared to those who chose the more traditional reward-based options.[22] Some of this funding was tied up in process with the Security and Exchange Commission to authorize Fig's use of unaccredited investors; Fig during this time covered Double Fine's development costs from their own capital. The matter was resolved by September 2016, assuring Double Fine will receive the amount funded or invested.[23]

In February 2016, Zak McClendon, who had previously worked as design director at 2K Marin and Harmonix announced he had been hired as lead designer for Psychonauts 2.[24]

In February 2017, it was announced that Starbreeze Studios had invested $8 million to help digitally publish the game across all platforms. They would recoup the investment by gaining 85% of the profit on sales, after the Fig investors are accounted for, until it is recovered, and then take 60% beyond that. The investment only affected the distribution, as Double Fine retains all control on the intellectual property and the development process.[25]

Double Fine had originally planned on a 2018 release for the title, but announced in December 2017 that with the game in full development and their planned roadmap towards release completed, they did not expect to release the game until at least 2019.[26] Double Fine premiered the game's first full trailer at The Game Awards 2018 in December 2018. Psychonauts 2 was in alpha at this time.[27]

By June 2019 Double Fine had been acquired by Microsoft as part of Xbox Game Studios. Microsoft purchased the publishing rights for the game from Starbreeze for $13.2 million . Despite the sale, Double Fine stated that Psychonauts 2 would still be released on all previously announced platforms (not being exclusive to Microsoft platforms).[28][29] The Microsoft acquisition allowed Double Fine to pay back the Fig investors earlier at a 139% return and increasing subsequent revenue-based return on investments from 70 to 85%.[30] Schafer said in a 2020 interview that prior to Microsoft's acquisition, they were at a point that they cut the boss fights out of the game due to lack of funds, but were able to re-add them afterward.[31]

In July 2019, Double Fine announced that they have delayed the game's release until 2020, wanting to make sure they make the game as good as players are expecting.[32] Double Fine announced in July 2020 that the game was further delayed to 2021, which will allow for an Xbox Series X-optimized version to be released as well.[33]