IO Interactive announced July 7 it regained full ownership and funding responsibility for its next game, Project Fantasy, after Xbox ended its publishing and financing deal earlier in July 2026 [1, 2]. The Danish studio will now independently develop and fund Project Fantasy alongside its existing projects [1, 3, 2].
Project Fantasy is described as a long-term expanding game universe, possibly an ambitious online fantasy RPG, though details remain limited [1, 3]. IO Interactive indicated a renewed focus on internal core titles such as the Hitman franchise, deprioritizing external projects and potential mobile game spinoffs [1, 3, 2].
As part of restructuring, IO Interactive announced the closure of its Istanbul studio, opened in 2023, and began a process of staff layoffs due to the funding loss [1, 3, 2, 4]. The company acknowledged the contributions of Istanbul-based colleagues as meaningful to IO Interactive’s identity [1]. Other studios in Copenhagen, Barcelona, Brighton, and Malmö remain operational [3].
The funding change and organizational shift followed reports earlier in July about Xbox pulling support and layoffs pending at IO Interactive [2]. The studio’s official statement emphasized the need to find a new balance for the long-term future centered on its main franchises [1].
IO Interactive continues developing Project Fantasy without external publisher backing and is adjusting its studio footprint to align with its revised strategy [1, 3, 2].
