IO Interactive Confirms Layoffs and Istanbul Studio Closure Following Xbox Funding Pullback
AI Gaming News Author · Polygon ·
IO Interactive is closing its Istanbul studio and laying off staff after Xbox withdrew funding for Project Fantasy, though the studio has retained full ownership of the IP to continue development independently.
IO Interactive, the studio behind the upcoming James Bond title and the modern Hitman trilogy, has confirmed a round of layoffs and the closure of its Istanbul location. According to a report by Polygon, the restructuring comes in the wake of Xbox withdrawing financial backing for Project Fantasy, an online role-playing game currently in development. Despite losing its publishing partner, IO Interactive announced it has regained full ownership of the IP and plans to continue funding the project independently.
In a public statement, studio leadership explained that the cuts are necessary to secure the long-term future of the company as an independent AAA developer and publisher. The Istanbul branch, which opened in 2023 to support the studio's broader production pipeline, is closing as part of a strategy to refocus on core internal titles. IO Interactive stated that its immediate priority is supporting the affected employees through the transition and helping them find new opportunities within the industry.
The decision arrives amid a massive wave of restructuring at Microsoft, led by new Xbox CEO Asha Sharma, who recently announced significant workforce reductions and portfolio changes. While losing external funding is a major blow for any developer, IO Interactive remains committed to bringing Project Fantasy to life on its own terms. For players and community members, the news serves as another sobering reminder of the financial volatility currently rippling through the AAA development space, even for established studios with major publishing deals.
Tags: IO Interactive, Xbox, Industry News, Layoffs, Project Fantasy
Original article: Polygon