The story of Double Fine is such a feel-good story, but it almost wasn't. A few years ago, if you said the name Double Fine aloud, you were talking about what could have been, or what should have been. You were talking about how you fell in love with games all over again because of the quirky, creative risk-taking in the ahead-of-its-time Psychonauts. Or you were talking about how you learned to loathe the major blockbuster game machine all over again because of the stunted promises of Brutal Legend. Or you were talking about how you used to love the games Tim Schafer made with LucasArts and wished he could make more of those, or modern games that were more like those, or something — anything — that would be both fun and successful.



What you weren't talking about — until very recently — was success.

Today, if you are talking about Double Fine, you are talking about a small company with big dreams that finally figured out how to make that work. You're talking about massive Kickstarter success, and games that are creatively ambitious, but on such a limited scale that they don't even have to succeed to be considered a success. And you're talking about great, big things on the horizon that could turn those stories of yesterday on their ear for once and for all.

Today, you're talking about a feel-good story. You're talking about passionate creators who stuck to their guns, made hard decisions and came out, if not on top, then at least on their way to it.

That's not a simple story. And it's not just one person's. It's not even two people's, but there are two people at the center of it.

One person is the anarchic Tim Schafer, whose wild-eyed dreams have fueled so much of Double Fine's success — and a lot of its failures.

The other is Steve Dengler, the financier known as "Dracogen" who, in spite of playing such a huge role in Double Fine's current success, is somewhat of a mystery man.

These men are two halves of one whole, in a way. The creative talent and the money-maker. The right brain and the left brain.

We wanted to tell the story of Double Fine, so we talked to both men. We decided that to tell their story properly, it should be presented as two halves of a whole, like the men themselves. And so here they are: two men, one story. Two stories, one page. We hope you enjoy.

Photo credit: Andrew Ferguson

Tim Schafer Tim Schafer

It's the second day of PAX, and Tim Schafer is signing Psychonauts posters at Double Fine's booth. He's talking to fans that have been playing his games since they were kids and he was working on titles at LucasArts. He's here showing the successor to Double Fine Happy Action Theater, known more simply now as Kinect Party.

"To really appreciate Kinect Party," Schafer says, "you have to turn it on when there are people over, or when there are kids in your house. And when you see that game, you'll see it's the greatest thing that's ever been done in front of people." Schafer seems excited about the game, and about Double Fine in general. "After you make three million dollars off the internet, you feel like you're not in a tunnel anymore, that's for sure," he jokes. "Having a million dollars in the bank is definitely a new chapter for Double Fine."

Three years ago things seemed different. After a prolonged squabble with Activision, Double Fine's second title, Brutal Legend, had just been released, and publisher Electronic Arts, which had taken the game on as part of its Partners program, concluded that sales had not met expectations. The planned sequel was subsequently canceled. "It was like being thrown into a pool after standing on the side for a long time," Schafer says. Double Fine was on the brink, without a publishing deal or a game in active development. And, as Schafer goes on to explain, it was probably the best thing that ever happened to them.

Motivations and obstacles

The Penny Arcade Expo is as loud as you might expect from a convention that tests the capacity of the Washington State Convention Center in Seattle. There are tens of thousands of attendees wandering in search of games of all stripes, and maybe even a chance to say hello to the people who make the games they've played for years; decades, even.

Given that, it's difficult enough to find a quiet place to talk at PAX, but when you were the lead writer on Day of the Tentacle and created Full Throttle and Grim Fandango — to say nothing of Double Fine's output over the last decade — things get more complicated. At one point, an excited fan who had contributed to Double Fine's wildly successful Kickstarter campaign for Double Fine Adventure interrupts Schafer, asking how she can follow the project's development. Schafer patiently explains how to find the DFA progress online, even reciting the URL, and thanks her for supporting it.

"For me, ideas are entertainment," Schafer says. "I love the act of them. It's like seeing a great acrobat, except they're doing it with creativity. I think that makes us have a certain kind of fan — all our fans are pretty creative themselves."

Double Fine wasn't always intended to focus so specifically on games. "Originally we talked about Double Fine as an [intellectual property] creation company," Schafer says, going so far as to explain how he wrote a sort of founding charter for the company in a notebook. "[We wanted] to make characters and worlds and turn them into different things, games and things like that. So it was funny to look back and think we'd have this really broad mission."

That's not quite what happened. While Psychonauts was a new IP and a new world, the production process was marked by the turmoil of an exclusive relationship with then-console newcomer Microsoft and its Xbox. Psychonauts and Double Fine were courted by then-vice president of game publishing at Microsoft Ed Fries, who was assembling a portfolio of exclusive titles aimed at defining the Xbox with consumers as the home of creative, interesting first-party games.





"We lucked out," Schafer says, recalling the situation in 2001. "When I leapt into it, I had just quit [LucasArts]. I figured it would work out." But Schafer is frank about how important the original deal was to Double Fine. "If we hadn't gotten that first game signed, I don't know what would have happened."

The deal with Fries and Microsoft to bring Psychonauts to the Xbox seems to have eased Schafer and his team's transition to the non-PC space after years of making PC adventure titles. "Ed Fries was pushing games as art," says Schafer. "But we always imagined, you know, being inspired by Super Mario 64, that Psychonauts would be a console-style game. It always would have been that."

Schafer is sanguine about the disintegration of the exclusivity agreement with Microsoft — after all, new publisher Majesco struggled to properly market or distribute Psychonauts when the platformer was finally released in mid-2005. "In a lot of those [first-party] relationships, you don't deal with Microsoft. You're really just dealing with people you know there. When Ed Fries is there, we really had a relationship with Ed Fries." Double Fine's "in" at Microsoft was gone when Fries left the company in early 2004. "When he left, all of a sudden we didn't have a relationship with Microsoft anymore. Each of those games has a relationship with a small subset of Microsoft, and a lot of these companies are shifting all the time."

After Psychonauts tiptoed to market with little commercial fanfare, Double Fine began work on Brutal Legend with publisher Vivendi's subsidiary Sierra Entertainment. But in 2008, as Vivendi's studios were absorbed by the formation of the Activision-Blizzard holding company, Double Fine faced new publisher difficulties. Activision reviewed its publishing slate and cut Brutal Legend from its lineup, and when competitor Electronic Arts picked up Brutal Legend for its Partners program, Activision balked, stating it considered negotiations with Double Fine ongoing. Activision filed suit against Double Fine and EA in June of 2009, which was met by a countersuit from Double Fine which alleged that the publisher had made an abortive attempt to transform Brutal Legend into a Guitar Hero title.

The lawsuit was settled in August of that year, amidst later retracted speculation by the Los Angeles Times that Activision had settled to avoid the embarrassment of losing their case in open court.

"I mean, it does work out for some people," Schafer says, regarding the publisher-developer relationship for AAA titles. "They get a real sweetheart deal, and they become family with the publisher." But Schafer later elaborated on his view of the importance of perspective for developers with regard to their publishing agreements. "Here's the hazard of even a good relationship with a publisher — there's an illusion that they're your parents," he says. "You think, 'They're taking care of me, they're paying my salary and they love me. They would never let me die, they'll protect me, because they're my parents.'

"IF YOU'RE NOT IMPORTANT TO A PUBLISHER'S BOTTOM LINE, THEY WILL CUT YOU LOOSE AND LET YOU DIE."

"And that's not what a publisher is. A publisher is a business. If you're making money they'll be in business with you, and if you're not important to their bottom line, they will cut you loose and let you die." Schafer doesn't begrudge Activision or other major publishing partners for their focus on the bottom line as such, stating, "That's what businesses should do. They're not here for emotions; they're here to make money. So as long as you can not fall for that illusion, that the publisher relationship is a parent-child relationship, then you're better off."

Kickstarter and direct contact with fans

Double Fine is the kind of developer that makes "favorite" games. While Psychonauts wasn't a Madden or a Call of Duty, more than many other more financially successful titles, Double Fine's titles seem to resonate with particular audiences in a very meaningful way. People get tattoos of their characters. At PAX, merch bearing the lead characters of Psychonauts sells briskly. This includes Brutal Legend, which despite its faults has found an audience that loves it passionately. "Brutal Legend is actually our best-selling game," Schafer says, though it wasn't enough to sustain the company.

"I loved making Psychonauts and Brutal Legend," Schafer says, "but I had this feeling that we were swinging from one big vine in the jungle, hoping that there would be another vine for us to catch. Right before we'd go out of business, we'd catch another vine." Schafer compares the big-game-or-bust mode to a 747 flight, "with moments of intense terror with a lot of peace in between."

Hearkening back to Double Fine's original mission statement, it wasn't what Schafer and his team had intended for the company. "I really didn't like that model. I wanted it to be like a business, where there's money coming in from lots of different sources. A cycle, like a four-stroke engine, instead of swinging vine to vine. Mixed metaphors." Some time after Brutal Legend launched in October of 2009, EA didn't pick up Brutal Legend 2 and Double Fine didn't have a vine to grab.

Double Fine did manage to catch a branch, however, thanks to a mid-project team sanity check during Brutal Legend's development that the team labeled the "Amnesia Fortnight." In an interview with Gamasutra, Schafer described the concept. "We took two weeks off and forgot about what we were working on — hence the title 'Amnesia Fortnight.' And we split the company into four teams and each team had two weeks to make a game."

Schafer explains to Polygon that the process was in keeping with Double Fine's strengths as a company. "I … wanted Double Fine to be about the creativity of everyone who works there, not just be labeled as my games. There were a lot of creative people there, there were a lot of great ideas, and I wanted to get out of their way." After the Brutal Legend sequel fell through, Double Fine turned to the four prototypes that came from the "Fortnight." "We thought, 'These would work in the downloadable space.'"

"So we had four teams going at once," Schafer says, "and that meant we could try anything."

If not for those four prototypes, Double Fine might be a very different company. "It would have been huge after Brutal Legend to say, 'Now we're going to focus on mobile.' That would have been a complete rebranding of our company, of our mission statement. Everyone at the company would have been really confused [about] what we were." Instead, Schafer says, "having multiple teams means that one group can say, 'OK, we're going to try a licensed product,' and another group can say, 'OK, we're going to do a kids-and-family game. We're going to try Kinect, we're going to try mobile, we're going to try free-to-play."

The games that resulted differed fundamentally in design philosophy from Double Fine's previous games, according to Schafer. "Brutal Legend came from a sort of top-down design," Schafer says. "It was a fantasy of a guy who's really into heavy metal who went into a fantasy land. So there was a series of questions: Should he have a guitar? Yes. Should he have a double-sided broadaxe? Yes. Should he be able to fly with great big bloody demon wings? Yes."

"I ... wanted Double Fine to be about the creativity of everyone who works there, not just be labeled as my games."

"All of this came from a sort of top-down 'let's build this fantasy and we have a lot of money to do it.'" In contrast, games like Stacking, Costume Quest and Iron Brigade resulted from specific conceits. "We had this reporting process where one person would have two weeks' time and they would say, 'OK, I'm going to have one mechanic, which is Russian stacking dolls which stack onto each other and take on the ability of the outer doll,' and that's all he got done in that two weeks. It was interesting for us as a company seeing the advantage of one mechanic pushed that way. Iron Brigade came out of that the same way, and Costume Quest.

"Our company doesn't have a rule about doing story first," Schafer says. "It's really that everybody who likes a game is empowered, and even required to own it. Lee Petty owned Stacking. And Nathan Martz was on Once Upon a Monster. They were reflections of who those people are." This is as much practical as philosophical, according to Schafer. "If I tried to run the company like all the games are 'Tim Schafer' games, and I was doing all the press for them, I would be spread too thin to help on those projects, you know, so we really decentralized that. But there's a tight bond and a culture, that really says what our values are."

The release of Costume Quest, Stacking and Iron Brigade proved to be something of a second renaissance for Double Fine. The company was quickly able to secure publishers for its four prototypes, and each game was received well critically. Within the course of about a year, the studio had doubled its number of shipped titles. But Double Fine remained a company depending upon new vines to swing from, albeit lower to the ground than the $40 million budget of Brutal Legend. The culprit was the same publishing model that complicated the development and release cycles for Psychonauts and Brutal Legend. Adding a licensed title to the mix with the Sesame Street-based game Once Upon a Monster added new wrinkles.

"I think even though I loved working with Sesame Street, and I learned a lot about the cost of working with licensed properties, I don't think that's right for Double Fine," Schafer says. "But," he quickly adds, "I'm glad we tried it once." He speaks about the virtues of Double Fine's then-newfound diversification. "We can try these things without totally committing our entire company to it and putting all our bets on one thing. And then if something works out, we can go grow that branch, or we can retreat and say that was a nice effort."

The real eye-opener for Double Fine turned out to be something that almost seems obvious in hindsight: self-publishing. After the lack of a deal for Brutal Legend 2, "our main business goal was to self-publish," Schafer says. "Our angel investor, Dracogen, has helped us fund PC ports of our games. When we published those, all of the sudden we started making money on our games. Which was an unusual thing for us."

Schafer is quick to explain the realities of Double Fine's business until recently. "Usually," he says, "when you have a big hit game, like a band with a hit record, your band gets rich. But no other bands get rich, right? The same with games." He spells out the fate of every game Double Fine released through an external publisher. "If you have a moderate-selling game, a game that breaks even or does well, you don't get any money from publishers."



Still, Schafer's responsibilities as the head of his own studio have shifted what's acceptable for Double Fine as a business. "In my younger years, it was OK," he says. "I was lucky enough to be creating these ideas, and that was the end goal. I want to be creative, and for every game I look at to be able to say, 'Wow, that's the game I want to make.' And in some ways I'm the luckiest person in the industry," Schafer admits. "[But] it was just lately when we started self-publishing that we actually prospered from some of our creations.

"We actually got the publishing rights back to Psychonauts. We got the PC rights to a lot of our games, and published them, and we instantly started making money. And we realized how much money we're losing out on by not controlling our own destiny. So, through the help of angel investors, and looking at things like Kickstarter, we're looking to get away from publishers, and to get better deals for ourselves."

"They have to make their money back," he <br /> explains almost apologetically, "to cover what they perceive as their risk."

Schafer explains that one of Brutal Legend's main hurdles was directly related to its publisher difficulties, presenting a what-if example. "We had a strong messaging problem with Brutal Legend's launch," he says, perhaps referencing the bewilderment in some corners of the gaming press and audience at the game's shift around a third of the way through to a sort of real-time strategy title, from what seemed to be a fairly traditional third-person action title. "If we had done Brutal Legend the way we're doing this Kickstarter project, if they had seen it as we were making it, seen the characters, and seen the insights into our design choices that we were making and felt like a part of it … I think people would have understood what we were going after, and would have seen the cool part of that game.

"I think Kickstarter is just a whole new way in general of doing business. I mean, if the fans fund it, it's not a risky thing. Kickstarter is sort of a self-selecting ecosystem." While other beneficiaries of massive Kickstarter campaigns have expressed an element of caution in the months after their success, Schafer seems more optimistic. "It feels like you're out in the sunshine and you're working with the fans … a big question for me is how do we do something big like the Kickstarter thing again successfully."

Life after Kickstarter

As successful as Kickstarter has been for Double Fine, Schafer seems to recognize that it is just another vine. Depending on Kickstarter probably isn't a reliable enough means of keeping multiple projects swinging, which is where self-publishing comes in. Self-publishing has given Double Fine the kind of income that had always eluded it, even for its first project. "We've looked at the numbers on stuff like Steam," Schafer says. "We made more on Psychonauts this year than we ever have before.

"We had good relationships with our publishers, and we got along for the most part," Schafer says. "It's just that they've got a lot of stuff going on. If you're not going to be the number one thing they put money on, you can't get on the floor of the trade show in their booth." Working with so many publishers over the last decade has been an effective education for Schafer and Double Fine in the business of games. "By being kicked out of the nest a few times, we've learned that every business is essentially on their own."

The could-have-beens for Double Fine if Brutal Legend had been enough of a success for EA to keep the sequel in development paint a picture of a very different Double Fine. "I think we'd be all about Brutal Legend in a way," Schafer admits, "which would be great, but we wouldn't have done all these other things. Things would be totally different, or maybe we would have had enough people and have put away enough extra money to look into projects. Maybe we would have started a side project.

"It's weird to say, but I'm glad it didn't work out that way. We're in a much better place right now. I mean, we've always responded well to adversity. We're a company that could survive. And what was really inspiring to me, was what saved us, and why we didn't go out of business after Brutal Legend, was that not me but the team had a lot of great ideas. And we made our salaries off of those great ideas for the next two years. And so that creativity saved the day. Which is a great sign. So, not that I'd want to have continual amounts of adversity, you know. But being forced to jump out of the nest and fly on our own was good for us, and might be good for a lot of people."

"Our fear was that next generation was going to be only big, AAA games. It was only going to be a place for Call of Duty and Halo."

Double Fine seems better positioned for the future than it's ever been. Just last week, it announced its first iOS title in conjunction with Dracogen, Middle Manager of Justice. "We don't know where [our mobile initiative] is going to go; it could be huge." Schafer says that Double Fine is exploring other forms of free-to-play games in addition to Middle Manager of Justice, the first of three free-to-play iOS titles scheduled. "I think you can start small. Looking at the free-to-play stuff happening on PC — not so much Zynga as League of Legends, and games making millions of dollars that you've never heard about. A lot of them start small, but provide a big world to explore that you grow to understand."

Larger projects seem unlikely for the time being, though Schafer isn't closing the door completely on the idea. "I don't think that we'll go back to that risk of putting 40 million dollars into something and cross our fingers and hope that it works," he says. Schafer does go on to say that "we're still talking about things like Psychonauts 2, which," he adds slyly, "we talked about last year with various Twitter experiences ... I do think that if we were to work with a partner on Psychonauts 2, I think that would be a game where [a higher budget] would be appropriate."

With the current console generation drawing to a close, is it likely that Double Fine will continue to develop for consoles, given the windfall via Steam? Schafer thinks he's aware of the obstacles that have stood in the way of smaller publishers on consoles — particularly the realities of releasing games on Xbox Live Arcade.

"Our fear was that next generation was going to be only big, AAA games. It was only going to be a place for Call of Duty and Halo. But we've talked to them, and told people what things would be hard for teams our size with regards to consoles," Schafer says. "Especially self-publishing, in terms of the cost of certification and patches and TCRs [technical certification requirements] and cost of even being considered a developer, you know. We'd still like to be active in that space, we care about consoles, but unless they open things up a lot more like what we have on Steam … if they opened things up more it would be a more friendly place from our perspective.

"We've talked to them about this stuff, and you know, they hear us. They're big companies and they can't make changes overnight, but I think they're taking all of that stuff into consideration. We'll have to see what happens. "

BACK TO TOP