IO Interactive Faces Layoffs As Xbox Partnership Ends For Project Fantasy
IO Interactive, the developer of Hitman and 007 First Light, has confirmed that there will be layoffs at the studio after a partnership with a third-party ended regarding its unannounced Project Fantasy.
Key Takeaways
- IO Interactive has confirmed imminent layoffs following the unexpected termination of a publishing partnership for its online RPG, Project Fantasy.
- The external partner who withdrew support is widely believed to be Xbox, which reportedly held exclusive publishing rights for the game.
- Despite the financial setback and restructuring, IO Interactive stated it remains fully committed to continuing active development on Project Fantasy.
IO Interactive has confirmed imminent layoffs following the unexpected termination of a publishing partnership for its unreleased online RPG, Project Fantasy.
According to a leaked document via IGN from the 2023 FTC vs. Microsoft trial, Microsoft originally held the exclusive publishing rights for the title, then codenamed Project Dragon, for Xbox and PC.
👉 READ ALSO: How 007 First Light Outperformed Hitman
What Happened Between IO Interactive and Xbox on Project Fantasy?
On June 30, 2026, IO Interactive announced that a relationship with an external partner, widely believed to be Xbox, on their original IP, Project Fantasy, had ended.
This cancellation is forcing the studio to adapt to a new financial reality, resulting in immediate staffing decisions and layoffs across the development team.
Is Project Fantasy Still in Active Development?
Yes, Project Fantasy remains in active development. In an official statement on X, IO Interactive confirmed they are fully committed to the game, assuring fans that “This wonderful universe will see the light of day.”
What This Means for IO Interactive’s Future
The abrupt end of the Project Fantasy partnership is a severe blow, but it does not signal the end of IO Interactive.
The studio is currently riding high on the critical and commercial triumph of 007 First Light, proving its capability to deliver blockbuster experiences outside of the Hitman franchise.
Fueled by a passion for gaming and the ever-evolving world of gaming news, Daniel loves connecting with seasoned and new players to bring games to life on the page, exploring their narratives and gaming trends. A self-published fiction and fantasy author, Daniel has nearly 20 years of experience writing gaming news and a love for storytelling that drives his enthusiasm to deliver breaking news, in-depth analysis, and industry innovations. You will find him in-game as "Windfell."
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