IO Interactive, the developer best known for the Hitman series and 007: First Light, has confirmed it is shuttering its Istanbul office. The closure, which includes staff layoffs, is part of a series of cuts the studio described as “necessary” to maintain its position as an independent AAA developer and publisher.
The decision follows a major setback for the studio: Xbox has pulled its funding for Project Fantasy, the developer’s mysterious upcoming RPG. With this withdrawal, IO Interactive has regained full ownership of the project and its associated intellectual property, and now intends to fund the development independently.
Restructuring for Long-Term Sustainability
In a statement regarding the changes, IO noted that the studio had to find a new balance to focus on its core internal titles. Beyond the closure of the Istanbul branch, the company is also scaling back efforts on external projects and potential mobile game derivatives. The studio emphasized that its structure as a fully independent publisher is a rarity in the current gaming landscape, and these cuts were made to give Project Fantasy the best possible foundation for success.
While the developer had signaled in June that layoffs were on the horizon due to the loss of the partnership with Xbox, this announcement serves as the first confirmation of the specific office closure and the scope of the personnel changes.
Shifting Priorities at Xbox
The move by Microsoft to stop backing Project Fantasy is part of a broader Xbox strategy to prioritize specific franchises over others. While the company has stated it is not reducing its total investment in games, it is reallocating capital toward projects it views as higher priorities. This strategy shift has also impacted other high-profile developers, including the cancellation of funding for the next project from The Last of Us creator Bruce Straley, as well as the next title from the creator of the Assassin’s Creed series.
As for the future of the studio's other major franchises, including the potential for a sequel to the critically and commercially successful 007: First Light, IO Interactive has not provided further details, leaving the status of those projects uncertain for the time being.