How Psychonauts Came Back From The Dead

By Edge on at

Double Fine’s founder and CEO, Tim Schafer, is a happy man. When we speak, the crowdfunding campaign for Psychonauts 2 has just ended, raising $3.8 million. It’s now a little over ten years since the release of its predecessor, a game that came alarmingly close to never seeing the light of day. That’s a long wait for a sequel, but Psychonauts is an exceptional case, having found itself in the hands of twice as many players in the past five years as its first half-decade.

Still, that’s a decade of fans clamouring for a follow-up. Is Double Fine doing this, we ask, simply to shut everybody up? Schafer laughs heartily. “In a way, it was a terrible failure, because now they’re just asking for Brutal Legend 2. Which is good! It’s a good problem to have. If people like something they like to ask for more, and it’s not always the right thing to do to give them more because what they really liked is what you did the first time, which is make something up from scratch. Psychonauts is kind of the exception – there’s more story to tell.”


He’s right: there is much more to tell about a game whose reputation has grown over time, with consistently enthusiastic word-of-mouth turning what was originally perceived as a failure into an unlikely success. It may have taken longer than anticipated, but this strikingly funny and inventive platform adventure has finally amassed a passionate audience, one that Double Fine had been told during focus testing would probably elude it. “They’d just say, ‘It’s got some problems,’” Schafer tells us, “namely the humour and the summer camp [setting]. So they wanted us to make it not funny and not set in a summer camp.” He laughs again.

Yet a happy ending for Double Fine had looked all but impossible in 2004. Psychonauts had been in development for four years when original publisher Microsoft dropped the game, and Schafer had failed to find another buyer. He stood up in front of the whole company, then numbering around 30 employees, and had to tell them that the following week’s payroll would be the last one. “My throat got all twisted up and I couldn’t talk any more,” he remembers. “Because we’d put everything we had into the game. We’d worked our asses off in crunch mode and now it was going to die and no one would ever see this game we made. It was all going to be for nothing and this whole company was for nothing. It was just too much. I couldn’t even speak, and we just sat there in silence for a long time.” Schafer eventually told his staff they could all stay and get their CVs together, before heading back to his desk, despondent.

We’d worked our asses off in crunch mode and now it was going to die and no one would ever see this game we made. It was all going to be for nothing and this whole company was for nothing. It was just too much.

It was a particularly bitter blow, as by that time Psychonauts had represented a significant portion of Schafer’s career. Double Fine was founded in 2000 and it was now 2004. But the initial seeds of an idea were sown during his time at LucasArts almost ten years earlier, during the making of Full Throttle. “I’ve always been interested in psychology and the idea of going on an interactive vision of some kind,” Schafer says. He conceived an interactive peyote trip, where protagonist Ben would take the psychoactive drug before hiking into the desert on a vision quest.

LucasArts, already concerned about the negative image surrounding biker gangs, wasn’t keen on the idea. “They basically thought I was going make Sons Of Anarchy way ahead of its time,” Schafer recalls. “And that was not the kind of biker story I wanted to tell. I wanted to tell a more romanticised [story], like a pirate adventure or a samurai movie. But I think going for a drug reference in Full Throttle was just too much for a family company.”


At the turn of the millennium, with his own company, Schafer was finally able to pursue a more daring idea and conceived the notion of a boot camp for gifted youngsters with psychic powers. This wasn’t to be the kind of adventure game with which he had made his name, but working in an unfamiliar genre was less about a desire to step outside his comfort zone and more to do with the games he was playing at the time. “I made adventure games because I was playing a ton of text adventures: I loved Zork, I played everything Infocom [released], so it made sense I would make adventure games. What first drew me to [3D platformers] was Super Mario 64, and then Final Fantasy VII and the first Tomb Raider. By then, it had started to feel a little fiddly to have to point and click – to select ‘open’ and click on a door to walk to the door and then go through it. I wanted to make a game that was still [about] puzzles, inventory and dialogue, but have the interface be less fiddly.”

Schafer knew he had an unusual idea, and wasn’t sure how he was going to pitch it. But he soon found a sympathetic ear. After delivering a speech at GDC, he was approached by Microsoft’s Ed Fries, who was seeking to expand the Xbox portfolio. Fries promptly invited Schafer to a party for speakers at the event. “He gave me this little ping-pong ball with an X on it that was his calling card at the time, and he started talking about games as art, and that was something I had always been pushing for.”

They’d just say, ‘It’s got some problems,’namely the humour and the summer camp setting. So they wanted us to make it not funny and not set in a summer camp

Schafer reveals, too, that he also approached Sony, but Microsoft’s terms proved more favourable. Sony, aware that this was new territory for Schafer, wanted to first see a detailed design document for a level before considering Double Fine’s pitch. “Whereas Microsoft were like, ‘Here are millions of dollars – we’d like to go,’” Schafer deadpans. “I mean, they did due diligence – ‘We want to meet your team, we want to know what your experience is’ – but they were more ready to go [for it] than Sony.” Not that he blames Sony, conceding the publisher was right to be concerned about the studio’s lack of experience. “I was pitching to Dave Jaffe at Sony, who wasn’t the God Of War guy at the time. And [Jaffe and I] joke about that a lot. I’m like, ‘You were probably right, but that doesn’t mean I should’ve dealt with you guys. Who knows what would’ve happened?’”

Having struck a deal with Microsoft, Double Fine set to work. These were uncharted waters for Schafer: having been part of an experienced team proficient in its genre using a familiar engine, he found himself leading a fledgling team facing a steep learning curve, with much still to learn. It was already an ambitious project: inspired by Michel Ancel’s work on Rayman 2, Schafer envisioned a game where every level would offer something new, not just a fresh aesthetic. “I don’t want to name names,” he says, “but in so many games you arrive on the scene, the theme of the level is explained, there’s a barrier, you find a switch, you throw the switch, a bunch of platforms appear and you go forward – and that’s repeated over and over again.”


All of this proved time-consuming: staffers worked separately on individual game mechanics, but it was a while before they could be assembled into something tangible. Fries offered as much support as he could, but an increasingly anxious Microsoft, itself a relatively inexperienced publisher in the console space, began to demand more evidence of progress from the studio. “There’s a negative cycle you can get into with publishers where if you’re struggling for any reason, they start trying to quote-unquote ‘help’,” Schafer says.

“They end up putting a kind of tax on you, because they want you to produce more documents to ease their worry that you’re messing up. So you create more documents to show you’re not and you go on these side courses and make special demos for them, and it all starts to put more and more of a burden on the project and makes things worse, not better.”

There’s a negative cycle you can get into with publishers where if you’re struggling for any reason, they start trying to quote-unquote ‘help’

Eventually, the problems came to a head and Microsoft asked for a vertical slice, tasking Double Fine with making a complete level and proving that the game was going to be fun to play. The stage chosen was Black Velvetopia, a dazzlingly colourful Spanish city patrolled by a rampaging, neon-pink bull. Everyone at the studio was happy with the results. And Microsoft? “They agreed!” Schafer says. “They said, ‘It’s fun – we’re going to keep going with your game. We’ll give you the extra money – we think this is worth it.’ And then, just months after that, Ed Fries left.” Fries’ replacement was quick to justify his appointment, cancelling seven projects. Psychonauts was, of course, one of them.

If the situation seemed disastrous, for a time it was also liberating: now Double Fine could work on the game without any kind of publisher interference. Removed from the pressure to prove itself, it could simply keep iterating on the game, so by the time it was ready to pitch again, it would be in a healthier position – particularly from the standpoint of a potential publisher. “They would immediately be able to see it was great and just want us to finish it,” Schafer says.


Finding a partner, however, proved more difficult than anticipated. Many publishers expressed their admiration for Psychonauts, but Schafer soon began to sense when a ‘no’ was imminent. “One by one, they all said the same thing. We’d pitch it and we’d be terrified to hear the words, ‘Oh, that’s very creative,’ because that was a sign that they weren’t going to sign it.” An adjective studios would welcome in a review was poison from an investor, because it meant passion project, not moneyspinner.

“We thought being creative, being new, was [good]. Look at all the biggest hits, all the really big franchises in games: when they first came out they were extremely creative. GTA broke tons of ground, Tomb Raider... They weren’t derivative games, you know? people shouldn’t fear creativity the way they do. I mean, there are tons of derivative games that don’t sell very well at all. I think the idea that if you play it safe you can make more money isn’t necessarily true.”

We’d pitch it and we’d be terrified to hear the words, ‘Oh, that’s very creative,’ because that was a sign that they weren’t going to sign it

Things were looking bleak as publisher after publisher passed, but at the 11th hour a saviour appeared to have been found. “One publisher was really interested,” Schafer tells us. “We had one great meeting after another, they really liked us and wanted to do it, and then they said, ‘We’re going to have one more approval meeting.’” But Double Fine couldn’t wait: it had just about run out of money. The publisher asked for the studio’s bank details to wire the money as soon as the deal was signed, and while Schafer was relieved, this didn’t help with the immediate problem of paying his staff. He found a generous friend to loan him $250,000, which would just about cover the next payroll, before the publisher called back with bad news. The deal was not going ahead.

After informing his staff and sitting back down at his desk, Schafer began to leaf through the unread emails in the company’s generic ‘info@’ inbox. Among a series of spam emails he spotted a missive from Majesco, offering to publish the game. Schafer raced from his office: “I said, ‘Don’t quit, you guys! Things are looking up!’” Relatively speaking, development was plain sailing thereafter. “This is a really strange analogy,” Schafer says, “but have you ever dated someone where you fight a lot and you keep making each other change? And they keep making you change, and you become a better boyfriend or girlfriend because of all the demands, but then there’s all these hard feelings because they asked you to make all these changes. Then you break up and you do all those new things for the next person you’re dating, and they just think you’re great.”


Keen not to interfere, Majesco let Double Fine get on with finishing the game, which finally launched in April 2005, to a positive response from players and critics. Yet history would record it as a flop, with widespread reports of just 100,000 copies sold and Majesco suffering severe financial difficulties as a result. It’s a reputation Schafer is keen to redress, noting the first run of around 400,000 copies sold through, albeit not all at full price. “I was pretty happy it sold that many, but the story out there was that it was a flop and that was really frustrating for us. Even people who were supporters of the game liked [that narrative] so much they exaggerated the floppiness of it, because they like that underdog story: ‘Look! No one appreciates great art!’ I mean, of all the things you could talk about with Psychonauts, were its sales really the most important, exciting story to tell?”

Psychonauts’ own story captivated enough players that Double Fine reacquired the rights from Majesco in 2011 and has supported it ever since: just last month it patched the PC version of the game to make the infamously challenging Meat Circus level a shade easier. Little wonder so many people have been happy to invest in the sequel, for which Schafer and Double Fine are now much better prepared. “This time we’re starting from a much more informed position,” he says. “With Psychonauts, we threw a bunch of mechanics together from games we liked at the time. Now we know what Psychonauts is, and we just want to make a better one.”

edge logoThis feature originally appeared in Edge, the world’s most respected games magazine, which has been running for over 20 years. Issue 290 is out now.