007 First Light studio IOI facing layoffs as Xbox pulls funding for Project Fantasy RPG
Xbox has ended its funding and publishing deal for IO Interactive’s online fantasy RPG codenamed Project Fantasy, prompting the developer to announce upcoming layoffs. The decision reflects Xbox’s effort to “take a fresh look at where we invest” and focus on “highest priorities,” according to an Xbox spokesperson.
IO Interactive, best known for the Hitman series and 007 First Light, will need to “adapt to this new reality and its short-term consequences, including staff decisions.” The developer stated it will “support those affected through this challenging transition.”
Despite the setback, IO Interactive has reaffirmed its commitment to Project Fantasy, emphasizing that the game “is a world, and an IP that we absolutely love” and “will see the light of day.” The statement suggests the studio intends to continue development, though likely with reduced resources and a different funding model.
The move signals Xbox’s broader strategic shift in where it allocates development funding as part of a portfolio restructuring. Project Fantasy’s future now depends on IO Interactive’s ability to secure alternative funding or pursue self-publishing.