San Francisco-based studio Double Fine made a big splash at E3 last week when Microsoft announced it was purchasing the makers of Psychonauts, Brutal Legend, Massive Chalice, and so many other games. It's the latest in a unique series of acquisitions and studio construction for the company, but while Phil Spencer and his colleagues move chess pices around the board, Double Fine has been hard at work finishing Psychonauts 2.

At E3 this year, the company set up shop next to the Fortnite booth to show off a (far too teeth-filled) demo that showed off the latest work 2005 cult classic. On hand was Tim Schafer, who was down to talk about both the creative drive fueling Psychonauts 2, the Microsoft acquisition and what he thinks GamePass means for studios like his.

What inspiration were you drawing on this time when you decided you wanted to make another Psychonauts game?

Obviously, the first game. Even playing that again for a lot of us took us back to who we were at the time when we made it. New ideas from the new team, as well as a lot of the old team being still around, working here for 18 years. A lot of people made it easy to jump back in.

Also, the artists and the voice talent and I were in that world for so long, creating those characters, that the characters were still alive in our brains. Stepping back into them felt really natural.

Going back to 2004 when the first Psychonauts was released, 3D platformers were very common. You had Beyond Good and Evil, Prince of Persia, etc. As a developer today, 3D platformers aren't what every company is chasing because tech has moved into other directions. How does it feel to have more space to make a game your team is creatively interested in as opposed to something that's chasing the immediate tech?

Yeah I didn't even know we were doing that at the time. I just really liked Super Mario 64, Ocarina of Time, and Skies of Arcadia. They're all different genres in a way, but they all have a central character exploring a really crazy world, and that was the inspiration for our gameplay. There was, as that advanced, a glut of character-based platformers, but I think there's a real dearth of them now, a real need out there.

I love brightly-colored stylized graphics with a lighthearted character and some comedy. I would love to see more of in games. But we're happy to provide it and fill that hole.

Double Fine's worked on some great games in the last few years - Broken Age, Massive Chalice - is there anything about the tech and tools the studio's built in that time that's made Psychonauts 2 easier to make?

Well we did make our own engine for the first game and then built on it, built on it, and then we threw it all away and started with Unreal. That helped in that, we could start from day 1 with a working engine to prototype character movements and not have to - starting the first game, we were all just working on paper while the engine was coming together. That was definitely very helpful.

But we still have knowledge about what we want our animation pipeline to be and what we want our animation pipeline to be, and our dialogue pipeline to be. We still have our dialogue database system and all these things we've picked up along the way.

And then there's the institutional knowledge of the team, just people who've been there for 18 years who know how I write scenes, and how the animators like to work with animatics, and those kinds of pipelines.

Those transitioned okay when you switched to Unreal?

Yeah we've been working in Unreal since Rhombus of Ruin. We still have a lot of programming work to do but it's all on stuff unique to the game, unique to Psychonauts 2.

During Psychonauts' development, Microsoft pulled their support for the game before it was finally released. This week, Microsoft bought Double Fine.

They felt bad about it, and now they made good on that. So all is forgiven!

What do you think has changed at Microsoft as a company that has made it possible for them to support Double Fine again?

I think they've had a commitment to a new way of acquiring companies which is, kind of an unplugged studio approach, where they're not merged into the larger corporate entity. They don't just auto-hire---take a bunch of employees and make them Microsoft employees. They want us to retain our identity, our spirit, that's what they want us to bring into the fold.

GamePass was a lot of it. Seeing something like GamePass and how it made sense to have a diversity of content. I could see why having a company like us and a company that makes games like Forza - very different games - all being on one subscription service like that makes it more valuable. I could see how they would want to bring us in and not change us.

We've been hearing from some different developers on GamePass. On the one hand, developers getting their games on GamePass has definitely benefited some a lot. On the other hand, we've heard worries that subscription services may make it hard to sell games at $45 to $60.

As a Microsoft-owned studio now, you get to be on the front end of benefiting from GamePass but as a former independent company do you have thoughts on subscription services?

I think there are a lot of questions about how things are going to go. When you look at other media, there have been different services that have been good and bad for creators. I think a lot of great movies and shows have been funded by Netflix, and it's made all these things possible, but other systems - musicians and such - have not done as well.

A key thing we're thinking about is like, our mission is always to get our games into as many hands as possible. If something like a subscription service brings down a barrier to players, so players can have access to our games, it's ultimately a good thing for us. We always ultimately benefit from more people playing our games.

I think it lowers the barrier to entry to people specifically for our kind of games that look a little unique and some people say off-putting. I look at those characters over there from Psychonauts and they're really appealing to me, but some people, it might take them a while to love them. So they might not be willing to risk $60 on a disc, but if they see that face sitting there next to a giant triple-A game [on GamePass], they might just give it a shot.

Getting a shot is all we ask for.

It also may lower a barrier to distribution in a sense because before - they could digitally download the game, but they had to make a $60 purchase commitment, versus now they can push "install," the pain point threshold happened earlier with Microsoft.

Now we have a chance to win them over with our gameplay and our characters.

Company initiatives sometimes only last as long as the people spearheading them are at the company. Even with great leadership currently at Microsoft, what would you hope the company kept consistent so studios like you, Obsidian, etc. can keep operating the way you want to operate?

That's always been a fear, and that's happened to us before. What I think is even - Matt Booty [head of Microsoft Studios] is really great, there's also [Xbox chief] Phil Spencer and there's so many people on their teams. It's not just one person, it's these teams and a philosophy that permeates all of Xbox Studios, and I've never met Satya Nadella but according to them it goes all the way to the top of treating the acquired companies right, and I think that spirit would live on, although I hope nothing happens to the team we have there because they're great.

At the 2019 Game Developers Choice Awards you had some (really great) jokes about the conversation about unionization in the games industry. If the team at Double Fine came to you and said "Hey Tim, we like working here, we're having a great time, but we still want to organize and form a union so we have a voice at the table when it comes to things like Microsoft," have you thought about what your response would be?

It would be the start of a conversation. I don't honestly know, I was making jokes but I wasn't making any firm positional statements. I just think it's worth talking about and not being afraid of, and I think there are problems we want to fix, like abuse of employees and crunch mode, and pay differentiation. Those are all things we want to fix in the games industry. I'm not sure if unionization is going to fix that exactly or is the right way, and I'm scared - who knows what would [unionization] make it so we couldn't do?

There's a lot of questions, and I'm not opposed to talking about it, I just don't know what the answers are.

We already use union talent. All our voice actors are union, when there's a union we always work with them, we don't have any sort of anti-union stance at all.

At GDC 2019 this year, we saw a lot of talks about how mid-sized companies are focusing on game development as a live process, whether it's game updates, DLC, or pre-release updates. The business of making games is now a longer tail than most developers ever imagined. Have you thought as a company head about what Double Fine and other studios of your size need to be working on to make games that can stand out when players are starting to expect that out of their games?

There's no one prescribed role for what games have to be. Big triple-A games have these season passes and this idea that you're just going to play their game forever and I don't think that has to be the way. I think you can have a cool indie come out like is Baba is You or something, you play that for a while, then you play something else. You don't have to have those kinds of relationships with games.

There are all different types of games, all different types of price points, all different types of relationships. So I think it's really about what's right for the game.

I think the good thing about being acquired is you don't have to think about these monetization schemes in terms of just strictly monetization, but what would be best for players, what would be best for the game.

Is there anything in the future of game-making possibilities that you all are excited for?

The great thing about the acquisition is it lets us refocus - it lets us focus at all - instead of making a game while worrying about all these other aspects. For me, I'm going to be focusing on Psychonauts 2, Lee [Petty] is going to be focusing on Rad, and then we can think about new games and being able to develop them and being in a place where we can pursue strange new ideas.

I'm really just excited about pursuing ideas that feel experimental.