IO Interactive Faces Layoffs as Project Fantasy Partner Withdraws
IO Interactive is currently undergoing a round of layoffs following the departure of an unnamed “external partner” from the production of its new IP, Project Fantasy. While the studio did not explicitly name the company, sources have confirmed that the partner in question was Xbox, which had been linked to the project since a series of FTC leaks several years ago.
In a message posted to LinkedIn, the Hitman developer acknowledged the difficulty of the situation. “A relationship with an external partner on our own IP, Project Fantasy, has come to an end,” the studio wrote. “This means we have to adapt to this new reality and its short-term consequences, including staffing decisions.” The studio noted that they are currently supporting those affected by the transition.
The Future of Project Fantasy
Despite the loss of its publishing partner and the resulting internal staff reductions, IO Interactive insists that the project remains a primary focus. The studio’s statement was definitive regarding the game's future: “Project Fantasy is a game, a world, and an IP that we absolutely love and remain 100% committed to, now and in the future. This wonderful universe will see the light of day.”
This development follows a period of uncertainty for the project. Last year, reports surfaced that the game’s online ambitions were scaled back amid wider organizational cuts at Microsoft, though Xbox had remained involved at that time. During an interview last month with The Game Business, IO Interactive CEO Hakan Abrak declined to comment on the identity of the partner but maintained that the game was in a “very healthy place” and remained financed.
Context of Industry Cuts
The news arrives as Microsoft continues to implement widespread restructuring across its gaming division. The company is reportedly planning steep cuts, which include the potential closing or spinning off of several first-party studios. These moves have created a climate of uncertainty for many developers, with unionized workers at Xbox recently expressing frustration over the lack of transparency regarding job security.
IO Interactive, known for its work on the Hitman series and its recent title featuring a "young, unproven Bond," has not provided further details on how it plans to fund the remainder of the project's development without the support of its former partner. Microsoft did not respond to requests for comment regarding the end of the partnership.