IO Interactive has regained full ownership of Project Fantasy after Xbox ended its external funding partnership, according to a statement from the studio on X.
The studio will continue to develop and fund Project Fantasy independently. IO Interactive also confirmed it is closing its Istanbul studio, which will result in 40 job losses.
This announcement comes as part of a broader Xbox restructuring that includes 1,600 layoffs immediately and up to 3,200 total cuts through fiscal year 2027. IO Interactive is best known for the Hitman series and 007: First Light, the studio’s fastest-selling game.
What IO Interactive Regained With Project Fantasy
The studio announced on X that, following the end of its external finance partnership for Project Fantasy, IOI now owns full rights to the project and its intellectual property. The company said it will continue to develop and fund the project independently alongside its other initiatives.
Holding complete IP ownership is an important point because it gives IO Interactive control over the project’s direction, scope, and timeline without external constraints.
Studios that lose publisher backing often struggle to maintain ongoing development, but IO Interactive’s success with 007: First Light and its established Hitman revenue provide a stable financial base to continue progress.
In the same statement, IO Interactive confirmed it closed its Istanbul studio. The company explained, “We had to find a new balance for the long-term future of the studio, focused on the success of our main internal core titles.
This has meant the closure of our Istanbul studio and starting a process to part ways with colleagues. These are tough but necessary decisions to secure the long-term future of IO Interactive and give Project Fantasy the best possible foundation to succeed under our own passion and direction.”
The closure will result in the loss of 40 jobs at the Istanbul location. IO Interactive did not specify details about severance, support for affected employees, or whether any roles based in Istanbul will be preserved through remote work.
Why IO Interactive Is Closing Its Istanbul Studio
Xbox has cut funding for Project Fantasy as part of a larger restructuring announced last week. The Xbox changes include 1,600 immediate layoffs across the gaming division and a total headcount reduction of about 3,200 through July 2027.
The company is also spinning off several studios, including Compulsion Games, Double Fine, Ninja Theory, and Undead Labs. Additionally, there have been cuts at Bethesda, ZeniMax, id Software, Activision, Obsidian, and the Accessibility Team.
The focus is shifting toward core franchises such as Fallout, Elder Scrolls, Doom, Quake, and Wolfenstein.
Project Fantasy was among several externally funded projects affected by the restructuring. Reports indicate that Xbox also withdrew funding from 1666: Amsterdam earlier this year.
Despite the funding removal, Project Fantasy remains under IO Interactive’s ownership, meaning development continues under their control. The intellectual property rights, characters, and world-building elements stay with the studio.
The project now competes for internal resources alongside other IO projects like updates for 007: First Light, Hitman content, and more. The timeline for release may be extended, reflecting the shift from a publisher-funded model to a self-funded one.
For players, the impact in the short term should be limited. Little is publicly known about Project Fantasy beyond its existence as an IP; no release date, platforms, or gameplay details have been shared.
How Xbox’s Restructuring Affects Project Fantasy
The Xbox restructuring is having noticeable effects across the industry. Studios that previously received funding from Xbox are being spun off, sold, or losing external support. This pattern suggests a change in how Xbox invests in third-party development, now focusing more on internal projects rather than external partnerships.
Whether ending Project Fantasy funding is financially wise will depend on how Xbox’s internal lineup performs compared to the projects it has chosen not to support further. IO Interactive’s ongoing work on Project Fantasy will serve as one measure of the trade-offs involved.
Project Fantasy is still in development at IO Interactive, with no announced platforms, release date, or gameplay details. Fans can check IO Interactive’s official channels for future updates.
The closure of the Istanbul studio is currently underway. IO Interactive has not provided a specific timeline for completing this process or details on how it might affect ongoing projects that the studio was working on.
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