Nobody could have guessed the next title to come out of the creative minds at Double Fine Productions.

Everything about this announcement might seem like a joke, but I assure you it’s 100% real. Tim Schafer’s Double Fine Productions and Warner Bros. are teaming up to create a brand new Sesame Street game for the Xbox 360 that uses Kinect.

Huh? Yeah. The company behind Psychonauts, Brutal Legend, Costume Quest, and Stacking is now working on a game called Sesame Street: Once Upon a Monster, and I can’t help but think that it’s awesome.

Once Upon a Monster takes place in a living storybook where Elmo, Cookie Monster, and other Sesame Street characters hang out on the regular. Players will use Kinect to dance, jump, fly, and more as they learn about making friends, cooperation, and their own emotions.

The goal behind the game is to get families and kids to play together in a learning environment. Tim Schafer says that Sesame Street is looked upon fondly by the Double Fine team, and the studio wants to bring it to today’s kids through a “cutting-edge” gaming experience. The game’s content is guided by the social and emotional curriculum of the Sesame Workshop, the non-profit organization behind Sesame Street.

When it was announced that Warner had plans to develop a new line of Sesame Street videogames, nobody expected they’d be handed off to a studio like Double Fine, but I think it was an incredibly smart move. While Once Upon a Monster might not be the next Stacking, it still seems like Double Fine is doing something on the same level of uniqueness. It just happens to be doing it alongside a popular franchise this time.

Sesame Street: Once Upon a Monster will be released in fall 2011.

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