Update: IO Interactive has now confirmed the closure of its Istanbul studio and provided new details about the restructuring and the future of Project Fantasy. This article has been updated throughout to reflect the new information.
After a fantastic launch for 007 First Light and an exciting few months for Bond fans, IO Interactive is now facing a major setback. The end of a financing partnership on another of its games has led to layoffs and a wider restructuring of the company, including the closure of its Istanbul studio.
At the centre of the situation is Project Fantasy, a new online fantasy RPG based on an original IP created by IO Interactive.
The project appears to date back to at least 2021, when the first reports emerged about an IO Interactive fantasy RPG codenamed Project Dragon. In February 2023, IO Interactive officially announced Project Fantasy, describing it as a new online fantasy RPG and an entirely original IP.
Now, several years into the project’s development, IO Interactive has announced that its external finance partnership on Project Fantasy has come to an end.
The studio did not initially identify the company involved. There was, however, already strong evidence pointing to Xbox. Internal Microsoft documents that became public in 2023 as part of the US Federal Trade Commission’s legal proceedings over Microsoft’s acquisition of Activision Blizzard listed Project Dragon as an IO Interactive title connected to Xbox Publishing.
Following IO Interactive’s initial statement, an Xbox spokesperson confirmed to Bloomberg that Xbox was the external partner that had ended its involvement with Project Fantasy.
The end of the partnership has had immediate consequences. IO Interactive initially said it had to adapt to a “new reality” and its “short-term consequences, including staffing decisions” — decisions that have resulted in layoffs.
The company has now provided more detail about the scale of those changes and what comes next.
IO Interactive closes its Istanbul studio
The consequences extend beyond individual layoffs. Earlier reporting by ExpectingMrBond.com found that employees from different IO Interactive locations and disciplines have been affected, including long-serving employees and people who previously worked directly on 007 First Light.
The most significant development was the closure of IO Interactive’s Istanbul studio, first reported by ExpectingMrBond.com and now officially confirmed by the company. The studio had only opened in March 2023 as IO Interactive’s fourth development location and was intended to play a significant role in the production of 007 First Light, Project Fantasy and Hitman. Just over three years later, it has closed its doors.
Following the end of the financing partnership, IOI says it had to find “a new balance for the long-term future of the studio.”
The company describes the resulting decisions as “hard, but necessary” to remain one of the few fully independent AAA developers and publishers. Its immediate focus is now on supporting those affected, and IO Interactive has publicly asked the wider industry to help connect departing employees with new opportunities.
The wider context at Xbox has become even more striking over the course of the same week. Microsoft has announced plans to cut around 3,200 jobs across Xbox over the course of its financial year, including around 1,600 immediately. Compulsion Games and Double Fine will return to independence, while Ninja Theory and Undead Labs are set to move to new owners, with further cuts also affecting major internal studios including Bethesda and id Software. Project Fantasy appears to have been caught up in the same broader reassessment of where Xbox invests.
The consequences have now come full circle: Xbox’s restructuring led to the end of Project Fantasy’s external financing and, in turn, to a restructuring at IO Interactive itself.
What comes next for 007 First Light and Project Fantasy?
The immediate future of Project Fantasy is now much clearer. Following the end of the external financing partnership, IO Interactive says it has regained full ownership of the project and its IP and will continue to develop and fund the game independently alongside its other projects.
The studio says the restructuring is intended to give Project Fantasy “the best possible foundation to succeed under our own passion and direction.”
“Project Fantasy is a game, a world, and an IP that we are wholly committed to, and we cannot wait to share the love with you,” IO Interactive said.
The new statement also raises questions about the rest of the company’s portfolio. IO Interactive says its future focus will be on its “main internal core titles” rather than external projects and potential mobile game derivatives. There is currently no indication that this will affect post-launch support for 007 First Light.
The longer-term picture is less clear. It would be premature to suggest that a potential 007 First Light sequel is at risk, but IO Interactive’s new emphasis on its “main internal core titles” raises questions about how another Bond game would fit into the company’s future strategy.
Finally, we want to send our heartfelt support to everyone affected. As fans, we know how much talent, passion and hard work goes into creating the games and experiences that mean so much to us. We are deeply grateful for everything they have contributed and wish them all the very best for whatever comes next.
Image credit: IO Interactive, Pexels.com
Source:
Bloomberg.com – Xbox Pulls Out of “Project Fantasy” Video Game from IO Interactive
