IO Interactive, the developer behind Hitman and the upcoming 007: First Light, has announced the closure of its Istanbul studio and a round of staff layoffs. The news comes after the studio lost its external funding partner for Project Fantasy—an online fantasy RPG that has been in development for several years.
While IO Interactive did not explicitly name Microsoft in its public statement, it is widely understood that the project was funded by Xbox. This development follows a period of massive restructuring at Xbox, where CEO Asha Sharma recently announced 3,200 layoffs and the offloading of four studios, citing a failed gaming strategy and lower-than-expected growth for Game Pass.
The Future of Project Fantasy
Despite the loss of its funding partner, IO Interactive confirmed that it has regained full ownership of Project Fantasy and the project remains a priority for the team. The studio plans to continue development and funding for the game independently alongside its other active projects.
"These are hard, but necessary decisions in order to retain the long-term future of IO Interactive as one of the very few fully independent AAA developer and publisher, as well as to give Project Fantasy the best possible foundation to succeed under our own passion and direction," the studio stated. The team emphasized that it is "wholly committed" to the world and IP, noting that it will focus on core internal titles moving forward rather than external projects or mobile derivatives.
Restructuring Across Global Studios
The impact of the funding loss is significant for the studio’s internal operations. Beyond the total closure of the Istanbul office, the company has begun a process to part ways with staff members across its remaining locations, which include its Copenhagen headquarters and satellite studios in Barcelona, Brighton, and Malmö.
The studio has requested that the gaming community offer support to those affected by the layoffs, asking for help in connecting impacted staff with new opportunities. "Our immediate focus is on supporting those affected as best we can through this period," the statement read.
This news adds to a complex period for the developer. While the studio works to stabilize its internal operations, it also faces shifting dynamics for its future 007 projects, as Amazon has acquired the publishing rights for the 007: First Light franchise, granting the retail giant more control over future releases.