[5] While studying computer science at UC Berkeley, Schafer became interested in writing, and took inspiration from Kurt Vonnegut, who while a publicist at General Electric wrote short stories in the evenings.

Schafer opted for a similar course, interning to help develop databases for small companies while trying to position himself for an opening in a larger corporation such as Atari and Hewlett-Packard, but he was rejected by these.

[6][7] To make up for the phone interview, Schafer sent in a comic of himself applying for and getting the job at Lucasfilm Games, drawn as a text adventure.

He, alongside Dave Grossman, helped to playtest Indiana Jones and the Last Crusade: The Action Game and implement the NES version of Maniac Mansion.

Schafer and Grossman, along with two others, were taught by Ron Gilbert as part of a "SCUMM University" on how to use the engine to set up rooms and puzzles.

[6] Later, Gilbert approached Schafer and Grossman, offering them the chance to work on his new project, which would ultimately become the pirate-themed adventure game The Secret of Monkey Island.

[10] In his first lead role on a game project, Schafer co-designed (with Dave Grossman) Day of the Tentacle, a time-travel comedy adventure and the sequel to Ron Gilbert's Maniac Mansion.

[12] He went on to design the highly acclaimed Grim Fandango, a noir adventure game set in the Aztec afterlife featuring characters similar to the papier-mâché skeleton decorations from the Mexican holiday Dia De Los Muertos.

[20] The game was Schafer's tribute to the music and art of heavy metal and featured voice acting from actor/musician Jack Black and cameos from rock musicians including Lemmy Kilmister, Rob Halford, Ozzy Osbourne and Lita Ford.

After Brütal Legend's release, the game had generally positive reviews but did not perform as well as expected, and Electronic Arts cancelled the preliminary work Double Fine had started on the sequel.

[22] To keep Double Fine above water financially, Schafer went back to the past Amnesia Fortnight projects and selected games they could reasonably expand into full releases.

[34][35] Schafer hosted the 2015 Game Developer’s Choice Awards on March 5; during the event one of his jokes referenced the #NotYourShield tag connected to the harassment Campaign.

[36] Following the event, Gamergate supporters targeted Schafer for harassment by claiming he had been making a joke that mocked the minorities using this hashtag.

[37][38] Gamergate supporters also found other opportunities to target Schafer for harassment, including a decision to expand the scope of Broken Age after its Kickstarter crowdfunding campaign raised far more than the amount asked for, and a later decision to seek additional funding for the studio by offering the game's first half for sale on early access.

Schafer stated that while he had not been looking to be acquired, he found the opportunity in his talks with Microsoft to be promising; the acquisition would not affect Double Fine's independence and would still allow the company to publish its pending titles on its own choice of platforms, and would provide the financial security needed for Double Fine to be able to concentrate on developing a quality product.

[52][53] In February 2023, Schafer was recognized as "a beacon of creativity and innovation in the games industry" by being selected as a Hall of Fame Inductee at the 26th Annual D.I.C.E.