Xbox pulls Project Fantasy funding, forcing IO Interactive to close Istanbul studio
Summary
Xbox withdrew funding and publishing for Project Fantasy as part of a 3,200-layoff restructuring and five-studio divestment
IOI regained full IP ownership of Project Fantasy but closed its Istanbul studio, opened just two years ago in 2023
Active studios on Project Fantasy drop from five to four, concentrating development in Copenhagen, Brighton, Barcelona, and Malmö
"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"
01
Xbox layoffs force IOI into a self-funding trade-off
Xbox exited the Project Fantasy deal after "reevaluating the types of projects it wanted to invest in," per its statement to Bloomberg
The pullout is a downstream effect of Xbox's largest restructuring: 3,200 cuts and five studios divested or spun off
IOI regained full ownership of Project Fantasy and its IP but must now fund the online RPG alone
Self-funding forced a refocus on "internal core titles instead of external projects and potential mobile game derivatives"
02
Istanbul absorbs the operational cost of IP retention
IOI Istanbul opened in 2023 in Sarıyer district as a AAA foothold in Türkiye - closed after roughly two years
The studio contributed to 007 First Light, upcoming Hitman titles, and Project Fantasy
Closure cuts active Project Fantasy studios from five to four
IOI's remaining footprint is Copenhagen HQ plus Brighton, Barcelona, and Malmö - Europe-only, no emerging-market presence
03
Independence from Square Enix now carries a headcount price
IOI regained independence from Square Enix in 2017, a rare AAA studio without platform or publisher ownership
Absorbing a self-funded online RPG while running Hitman and 007 pipelines required immediate capacity cuts
The closure signals the real cost of AAA independence when first-party backing disappears mid-development
Events
Companies
Games
Locations
Europe
SYNTHESIZED FROM:
- IO Interactive to shutter Istanbul studio following end of Project Fantasy deal with Xbox | GamesIndustry.biz
- IO Interactive Regains Ownership Of Project Fantasy Following Xbox Split - Game Informer
- IO Interactive closes Istanbul studio, lays off staff after Xbox exits Project Fantasy deal - GamesBeat
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