Updated:There are in fact two new studios at Microsoft.
"With the addition of Double Fine, there will be a total of 15 unique, standalone studios that comprise Xbox Game Studios, including our newly-created Age of Empires studio headed by Shannon Loftis and our Publishing group headed by Peter Wyse," Xbox Game Studio boss Matt Booty said.
"We are committing more resources and dedicated leadership to the Age of Empires franchise to ensure that its legacy on PC continues in service of the passionate community of faithful fans.
"I’m proud of the 14 games we showcased from Xbox Game Studios today – the most we’ve ever had in our E3 briefing. We have the full depth and breadth of talent in our studios focused on creating new games for Xbox players, and we’re committed to making them great."
News of the deal was revealed during Microsoft's E3 2019 press conference. Double Fine, founded by Tim Schafer, is currently working on Psychonauts 2. The game will be available on Xbox Game Pass at launch, as with all titles developed by Xbox Game Studios.
Terms of the deal were not disclosed .
Double Fine joins a growing list of in-house Xbox studios. At last year's E3 it announced the acquisitions of State of Decay developer Undead Labs, Forza Horizon studio Playground Games, Hellblade creator Ninja Theory and We Happy Few outfit Compulsion games.