If you haven't already, try playing the game without making any changes. Sometimes the controller works without any changes needed.
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2023 December Update: See the bottom of the guide for an additional possible solution.
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The first thing you should do is make sure your Xbox controller is selected as the default for older games. To do this:
-Click "Start"
-Type and then select: devices and printers



-Right-click on your Xbox controller and choose "Game controller settings"



-Click "Advanced..." (Bonus tip: "Properties" lets you calibrate your controller and see which buttons the numbers correspond with.)



-Drop down the "Preferred device" selection box and choose your Xbox controller.



-Finally, press "OK"


A few tips before starting the game:
-Make sure the controller is plugged in and working before you launch the game.
-Avoid big picture mode.
-Make sure to move the mouse away from the game window, otherwise menus will select where the mouse is sitting.

Once you launch the game:
-Press "F1" to bring up "Game Properties"
-Select the "Gamepad" tab (I needed to use Ctrl+Tab, then tab, and then down/up arrows on each option because the mouse wasn't showing.)
-Refer to this graphic to see what button presses correspond with which number.
http://steamproxy.net/sharedfiles/filedetails/?id=888928491


Here's how I setup my controller bindings.


(The in-game gamepad menu is unintuitive so try setting it exactly as you see here.)

This setup should make it so that:
-Left stick controls your character
-Xbox button "A" advances dialog/selects/action
-"B" goes back/brings up menu/cancel
-"RB" cycles through characters
-"Start" brings up the Skills menu in the Status - Abilities menu (where in-game you see "Press [Z] to view the Skill Menu")


Bonus tip: As with several other indie games, Alt+Enter gets this game into fullscreen mode. Also, check your video card control panel to adjust aspect ratio/scaling/sync settings as needed.

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Thanks to user @Abomination713 in Dec 2023 we now have this newer/alternate solution from the forums:
-Right click game in Library > Manage > Controller Layout > Disable Steam Input

-If you do not see Controller Layout in the Manage tab, you can still access it by clicking "view controller settings" on the right side of the screen when you have the game clicked. There is also a controller button you can click that will also open the menu to disable Steam Input (or turn it back on if you so wish).

-For whatever reason Steam Input stops the game from seeing the controller. Hope this helps anyone that comes looking.


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