Danish video game studio IO Interactive (IOI), the creatives behind the blockbuster HITMAN franchise and the newly released James Bond adventure, 007 First Light, confirmed on Tuesday that it will begin layoffs and close its Istanbul, Türkiye-based office following news that XBOX withdrew funding for IOI’s upcoming online RPG, Project Fantasy.
A new statement from IO Interactive, shared on the social media platform X (formerly Twitter), says the studio must find “balance” to protect its own long-term health, which it hopes to achieve by “[focusing] on the success of [its] main internal core titles.” IOI asserts, however, that its foremost priority is supporting studio employees affected by these changes.
Read IOI’s full message:
Dear gaming community,
Following the end of our external finance partnership on Project Fantasy, IOI has regained full ownership of the project and our IP. We will continue to develop and fund it independently amongst our other projects. With this context, we had to find a new balance for the long-term future of the studio, focused on the success of our main internal core titles instead of external projects and potential mobile game derivatives. This has meant making changes as well as proposed changes across our studios: the closure of our Istanbul studio and starting a process to part ways with colleagues who have been a meaningful part of what makes IOI what it is.
Our immediate focus is on supporting those affected as best we can through this period. If you are aware of any opportunities within your network, we would be genuinely grateful for any support you can offer to any of the talented people across IOI who might be looking for new opportunities.
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. 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IO Interactive revealed that its third-party Project Fantasy partner — now confirmed to be XBOX — had withdrawn financial support in a “downbeat” June 30 post on X. “For a good while, it has been all positive news from IO Interactive […] However, today we have to share some more downbeat news. A relationship with an external partner on our own IP, Project Fantasy, has come to an end.
“This means we have to adapt to this new reality and its short-term consequences, including staffing decisions, which is what is happening as we write this update, and we are fully committed to supporting those affected through this challenging transition.”
IOI ends its post on an optimistic note despite the tough news. “Project Fantasy is a game, a world, and an IP that we absolutely love and remain 100% committed to, now and in the future. This wonderful universe will see the light of day.”
Confirmation of XBOX’s discontinued partnership with IOI on Tuesday comes just one day after the former’s CEO, Asha Sharma, announced plans to lay off 3,200 employees — one-fifth of its total workforce — and divest five first-party video game studios. XBOX’s parent company, Microsoft, is expected to eliminate 6,400 employees as part of a company-wide cost-cutting strategy that will impact nearly 3 percent of the brand’s 228,000 staffers. The studios impacted by this measure include Double Fine, Ninja Theory, Compulsion Games, Undead Labs, and Arkane.
This is a developing story. Stay tuned to Outrun Gaming for more information as it becomes available.
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