Psychonauts 2 is in development, and anyone can profit from its success

"We are making Psychonauts 2," Tim Schafer told Polygon last week from Double Fine's offices in San Francisco. The independent studio's founder was also the writer of the original game, which debuted more than 10 years ago.

"For us, it's pretty monumental, considering it's the game that formed us as a company."

More monumental still is the fact that Double Fine's next game will be the first crowdfunded game to welcome investment from every fan — not just cash for T-shirts and downloadable game codes, but a share of the game's potential profits. Virtually anyone will be able to get a piece of the action.

And that campaign is scheduled to go live tonight.

In the beginning

At the center of the Psychonauts universe is Raz, a young acrobat raised in a circus who just happens to have latent psychic powers. The original game introduced the world to the Whispering Rock Psychic Summer Camp, a training facility maintained by the U.S. government thinly disguised as a children's retreat. Over the course of nearly a dozen levels, Raz used his burgeoning PSI powers — clairvoyance, pyrokinesis, telekinesis and others — to unlock the secrets of Whispering Rock, and unburden its troubled minds by exploring them from the inside out.

The game grew to be a cult classic, selling nearly 1.7 million copies — two-thirds of which were bought in the last five years.

But Psychonauts wasn't just Double Fine's first game. It was also an entirely new genre to many on the team.

"None of us had made anything like it before," Schafer told Polygon. Prior to founding Double Fine, Schafer had worked at LucasArts, where he helped to create titles like The Secret of Monkey Island and Grim Fandango. (You can read more on the founding of Double Fine in Polygon's massive double-feature story from 2012.)

"I had only made PC graphic adventures at that point, and we had never made a console game. Since then, we've been making a lot of console games ... so I feel like the 10 years since we shipped that one have definitely taught us a lot."

Sitting above Schafer's desk is a slim volume — the Psychonauts idea book — where he's been squirreling away the plans for Psychonauts 2 over the course of the last decade.

"It is weird that often the first things that you sketch out are the first scene and the last scene," Schafer said, noting that the arc is already mostly defined. "But, those are pretty clear in my head after all this time.

"I've had this story for a long time. I've had the places that I want to go, the locations and the minds — the key minds — that I want to go into. I know how I want that to work for sure."

The journey ahead

Psychonauts 2 is currently in pre-production, Schafer said. But Double Fine isn't the kind of studio that returns, again and again, to old franchises. That alone makes Psychonauts 2 a departure for the company. But, to hear Schafer tell it, he and his team already have a solid handle on the scale of the game that they want to make. The plan is to design and build a singular experience that matches the scope of the original.

"The first game had 11 mental worlds that you went into," Schafer said. "And there were two or three, depending on how you slice it up, physical locations. We wanted to do something similar to that, but the exact numbers are flexible.

"We want to do something that feels like an epic of a tale. We're not trying to do an episodic game that's smaller. We're trying to do something that will feel like what it felt like to play the first game."

Now Double Fine just needs the money to make it.

Just about everything Double Fine produces is from a fresh IP, which has created some challenges in securing funding from big publishers. That's part of the reason why, Schafer said, Double Fine has gone with crowdfunding for its last two games.

What has surprised the team is the outpouring of support it's had for its projects, especially for Double Fine Adventure, which went on to become Broken Age. That game's Kickstarter campaign ballooned well beyond its initial ask of $400,000 to a total of over $3.3 million.

Schafer stressed how different the production of Psychonauts 2 would be from that of Broken Age.

"When we started the Double Fine Adventure project, we didn't know what we were making," Schafer said. "We started and we said, 'Let's make a $400,000 Flash game.' We thought we were going to make this a point-and-click, really simple kind of thing. And then when we got $3.3 million, we said, 'Let's change it. We can do a different thing. We can do a bigger thing.' And we just figured it out as we went."

That expanding budget led to an evolution of that game, and a few development and production hurdles that have all been chronicled in the studio's documentary video series. Schafer says this time, things will be different.

"With Psychonauts 2, we have the first game as the model. We have this action-adventure platformer with stylized art and humor and dream logic and PSI powers and all the things that we know are going to be in it. So, we also have a model for the next game.

"I have a backlog of design ideas that we are now fleshing out with artists, and taking a look at the mechanics and what things we want to bring back and what things we want to add to it. So it's in that early stage of development."

The silent partner

The target window for the release of Psychonauts 2 is currently sometime near the end of 2018, but in order to get close to that mark, Schafer and Double Fine are turning to a curious blend of funding sources.

And no, none of them are Markus "Notch" Persson. Well, at least not yet. Or rather ... well, it's complicated.

You may remember a flurry of stories that made the rounds in 2012: Persson caught wind of a story, at one website or another, about how Tim Schafer had been shopping Psychonauts 2 around to publishers, and Persson threw his own hat into the ring.

"I had put together this pitch, and we took it around the old-fashioned way sometime around 2011," said Schafer. "... And they all said, 'Oh man, that would be so great. But no.'

"For whatever reason with publishers, it's hard to get a crazy game like Psychonauts published," Schafer continued. "And I was kind of despondent about that, and I remember mentioning it in an article. I was just talking about it and said that I would love to do Psychonauts 2, but it's just really hard to get that kind of funding.

"And I was asleep at the time. It was the middle of the night, and I woke up to my phone with, like, 50 messages and all these people saying, 'You should really check Twitter!' And I saw that message from Notch."

"It got a lot of people really excited. But practically the next day we were launching our first Kickstarter campaign for Double Fine Adventure."

That's precisely the moment when Double Fine landed $3.3 million for Broken Age. Notch and Schafer both more or less pumped the brakes, and the still-early plans for Psychonauts 2 went up in smoke.

@TimOfLegend Let's make Psychonauts 2 happen.

— Markus Persson (@notch) February 7, 2012

"I have NO idea if this is actually going to happen," Persson wrote on his personal blog at the time.

But Schafer does have another funding partner, a person or group that he says is in the game industry, but not traditionally a publisher. And, for right now, they wish to remain anonymous.

"It's not Notch," Schafer told Polygon. "It's really hard to not sound shady when you have these things you can't say, these certain numbers or whatever. And I don't want to be shady about it. It's just that I have other people's interests that I am not at liberty to violate. So, I'm just trying to talk carefully."

All Schafer can say is that the amount they're willing to contribute to the project has already been locked in. Schafer also told Polygon that the estimated budget for Psychonauts 2 is in the same ballpark as the original game's — which he says was between $10 million and $13.5 million — and that the final budget will depend on the total amount of money raised.

And, while a second significant portion of the funding for Psychonauts 2 will come from Double Fine itself, there still may be time for Notch to get a piece of the action yet.

A penny for your thoughts

The final funding source being pressed into service to support Psychonauts 2 is the startup crowdfunding platform called Fig — which we've covered extensively since its launch this past August.

Through Fig, Double Fine is asking fans to contribute a total of $3.3 million — the same amount it made on its first-ever crowdfunding campaign — through a blend of equity investment and traditional rewards-based backing. Thanks to new laws passed in the U.S. in 2012, that means virtually anyone is free to purchase an equity share in the success of Psychonauts 2.

What is Fig?

Launched in August 2015, Fig is a startup funded in part by Spark Capital, the same venture capital firm that's played a key role in funding Oculus VR, Twitter and Slack. Fig's business model is a lot like Kickstarter's, in that it helps to raise crowdfunded money for projects — specifically, game projects. But there's a twist.

Fig is the first crowdfunding equity investment platform designed with everyone in mind, not just high-net-worth individuals. After more than six months and nearly half a million dollars in legal fees, Fig is ready to open up equity investment to everyone.

To read Fig's origin story, and to learn more about how it's structured, you can find our first article on it here. For our latest article, with details on precisely how the campaign for Psychonauts 2 will work, click here. For every article about Fig ever published at Polygon, check out our StoryStream.

That opportunity, to own part of the future of this franchise, is one that Schafer has been trying to give his fans since that first Kickstarter back in 2012.

It's an all-or-nothing proposition, per Fig's own rules. But Schafer told us that if the campaign isn't successful, then the game simply won't get made.

"We've done crowdfunding before and our backers have always accepted that they feel good about giving us that money, but I feel there's always a little skepticism from people," Schafer said. "'Why should you get all this money for free, without giving anything back? You give T-shirts back, you give posters, but what if you guys get rich off this game? Where does that leave us?'

"And I think that's a valid question. I think people can ask that, especially when [you have] some companies that have gone on to crowdfund something and then sold their companies for billions of dollars. I think it's a valid question: What happened to the people that were there for you in the beginning?

"So, we've always wanted to find out if there was a way that you could share your profits with the people who backed you. And I was told, when I first asked that question, when we first launched that [Double Fine Adventure] campaign, that it's illegal. It's illegal to do that."

Being able to offer fans a piece of the profits from a franchise they love is just the next logical evolution of crowdfunding, said Schafer, because at the end of the day, making video games isn't a charity. It's a business.

"I think games are this weird combination of arts and actually making money. We actually make money from games — games that are art — and so we love our fans' support for the art that we make. Now we want to give back to them some of the benefits of our success."