IO Interactive Begins Layoffs After Xbox Ends Funding for Project Fantasy
*Xbox has withdrawn support for the unannounced online RPG at the Hitman studio, triggering immediate staff reductions.*
The news
IO Interactive is cutting roles after Xbox pulled out of a publishing and funding agreement for Project Fantasy, the studio’s first fantasy RPG. The move affects the Copenhagen team behind the Hitman series and the upcoming 007 First Light.
What changed
Until recently the project had an external partner relationship with Xbox. That arrangement has ended, leaving IO Interactive to adjust its plans and headcount. The studio described the cuts as short-term consequences of the new situation.
Details from the studio
In a statement, IO Interactive said it must “adapt to this new reality and its short-term consequences, including staffing decisions, which is what is happening as we write this update.” The company added that it remains “fully committed to supporting those affected through this challenging transition.” Layoffs are already underway.
Project Fantasy remains in development, though without the Xbox deal its scope and timeline are now uncertain. The title had not yet been formally announced to the public.
Context for the studio
IO Interactive is the latest game developer to announce reductions tied to the loss of an external funding partner. The studio continues work on Hitman content and 007 First Light, but the abrupt end of the RPG partnership has forced an immediate reallocation of resources.
Why it matters
Studios that rely on single-partner funding for new IP carry concentrated risk. When that partner exits, the cost falls on the team that built the project. IO Interactive’s statement is clear about the cause and the effect; the practical outcome is fewer jobs and a narrower path forward for an unlaunched game.
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