'Psychonauts 2' director: It's the 'Back to the Future 2' of video game sequels [Exclusive]

Psychonauts 2 is a video game sequel more than 16 years in the making.

There is no other game quite like the original Psychonauts. The quirky platformer sees players control a psychic boy named Raz, exploring other people’s minds to become a member of the titular organization. While the game flopped initially, it grew into a cult classic that has steadily gained a loyal following since 2005.

The game also ended on a massive cliffhanger where the leader of the Psychonauts is kidnapped. Developer Double Fine didn’t get the chance to continue that story until 2017’s VR game Psychonauts in the Rhombus of Ruin, and now it’s happening in earnest with Psychonauts 2.

“I always thought of the ending as a Back to the Future ending,” Game Director Tim Schafer tells Inverse. “Spoilers: Back to the Future ends with him flying off in the DeLorean! But you could easily have a sequel. I didn’t know what our options were going to be.”

Schafer is a renowned video game developer known for his humor and the cynical wit of his games, thanks to his work on LucasArts classics like Grim Fandango and Full Throttle. In 2000, he founded an independent studio called Double Fine. Psychonauts was its debut title.

Double Fine has since come a long way, putting out classics like rock 'n' roll RTS Brutal Legend and adventure game Broken Age. Now, the studio is wrapping up Psychonauts 2’s development with help from its new parent company, Microsoft, which acquired Double Fine in 2019.

Ahead of the game’s launch, Inverse spoke with Tim Schafer about how the sequel finally came to be years after the original. What began as a few humble Easter eggs in the first game are now serving as the foundation for a game that’s survived a crowdfunding campaign, development woes, and a massive acquisition.

Don’t Leave Me Hanging!

Psychonauts may have ended on a bombshell of a cliffhanger, but Schafer never knew if he’d ever be able to revisit the world. “I wanted to leave ourselves a lot of options,” Schafer says.

For Schafer, Psychonauts 2 is an opportunity to explore hints from the first game.

“I put a lot of seeds in the first game for story hooks,” Schafer explains, referencing the curse put on Raz’s family, the fracturing of Psychonaut Ford Cruller’s mind, and the open-ended nature of the ending. “They were left up in the air just a little bit,” he says. “If we didn’t get the chance to do it, it wouldn’t be a tragedy, but it’s really nice to pick up, expand, and pay off all those things in the sequel.”

For those who haven’t played the original or Rhombus of Ruin, a cute animated video within the game does a great job at getting you up to speed.

The Time is Now

Psychonauts was far ahead of its time in 2005 but still feels right at home in 2021. That’s not because of any political or mechanical relevancy, but because developers can afford to take more risks now. In a market full of indie and AA games like Undertale and Biomutant that aren’t afraid to be weird, Psychonauts 2 is in good company.

Schafer also believes that Psychonauts needed digital distribution to build up a die-hard fanbase that would sing its praises across the internet.

“It is the kind of game that took a while to find its audience, and I think the advent of digital distribution really was helpful,” Schafer says. “It’s a word-of-mouth type game where it’s very hard to compare it to other games. When people love it, they evangelize it. It takes a while for that to get around.”

And it sure did get around. Nearly a decade after the game’s initial release, demand for a sequel was greater than ever. That’s why it was so exciting when Psychonauts 2 was finally confirmed at The Game Awards 2015 and had a crowdfunding campaign on the website Fig. It raised a whopping $3,829,024 from fans eager to see the saga continue.

While the renewed popularity of Psychonauts certainly bolstered interest in the sequel, Schafer doesn’t think he could’ve made it any sooner than he did.

“After Psychonauts, we could have pushed for a sequel, but I really wanted to make Brutal Legend,” Schafer says. “It was often just that there was something new I wanted to do. After Broken Age, which was a great exploration of the 2D space, I really wanted to make a big 3D world again.”

Schafer says he loves exploration in video games, so he wanted to lean into that with the sequel. However, funding issues threatened its scope during development. $3.8 million will only go so far when developing a game with this niche kind of ambitious scale, and its original publisher Starbreeze ran into financial troubles in late 2018.

But that’s when Microsoft swooped in to help get Psychonauts 2 over the finish line without any significant cuts.

Acquired Taste

Microsoft acquired Double Fine as part of Xbox Game Studios’ aggressive acquisition strategy. It began a pattern that would eventually see the company acquire Bethesda parent company ZeniMax Media in early 2021.

Ironically, Microsoft actually dropped out of publishing the original Psychonauts in the early 2000s but is now fully responsible for the sequel. Despite that, Schafer says Double Fine has always had a positive relationship with Xbox, so the acquisition felt right.

“There wasn’t any dramatic scene where we walked out, though that would be better for the documentary,” Schafer clarifies before imagining his own alternative history of the deal. “I walk into a room, and Phil [Spencer, Head of Xbox] is like ‘Oh, it’s you.’ and I’m like ‘Oh, it’s you,’ and then we hug it out. Let’s just say that’s what happened. Yeah, that’s exactly what happened.”

Money’s no longer an issue for Double Fine, so major chunks of the game didn’t have to be shelved due to budget constraints.

“A lot of things were getting cut just so we could finish,” Schafer says of the game’s development pre-acquisition. “We had a rollercoaster ride of funding in the old days. The biggest cost of that besides the money is the stress. The team is trying to do the work, but they’re like, ‘Are we going to get paid in a couple of months?’”

Schafer says he can now solely focus on writing dialogue and doing creative work on Psychonauts 2 and other games instead of constantly pitching possible investors. He says that Microsoft hasn’t interfered with the team’s creative vision at all.

“What we’ve been able to do is do our thing, but do it without as much stress, fear, and mental tax as we did before.”

Of course, the Covid-19 pandemic also impacted development. Still, Schafer is grateful that the company could stay stable during that time thanks to Microsoft’s backing and is proud that his team is shipping a game from quarantine.

Inverse went hands-on with Psychonauts 2 for several hours in a demo build, and it’s already shaping up to be a hilarious and engaging platformer. Make sure you check out our full preview to learn more.

Excel Action Theater

So what’s next for Double Fine? In the short term, 2 Player Productions, a video game industry-focused documentary production company, has been recording and following Double Fine throughout the game’s development, just like it did with Broken Age. So there will be some documentary-style videos produced about the making of Psychonauts 2.

After that, the team has a lot of ideas.

“A lot of Excel documents-type work,” Schafer jokes. “We're a studio that likes to brainstorm and come up with a lot of creative ideas. We've been cooking up some for a while that we are excited to get started on. It's going to be a whole bunch of surprises.”

It’s hard to know what exactly to expect from the mind of Tim Schafer. Maybe we should ask the Psychonauts to investigate?

Psychonauts 2 will be released for Xbox Series X, Xbox One, PC, and PS4 on August 25.