IO Interactive has confirmed layoffs as a direct consequence of ending its collaboration with an external partner on Project Fantasy, a new online fantasy role-playing game. The studio emphasized its continued commitment to the project despite the restructuring, assuring fans that the game and its associated universe will eventually launch.
The external partner in question was identified through leaked documents related to the FTC’s investigation as Microsoft’s Xbox division. A spokesperson for Xbox told Bloomberg that while the company is adjusting its focus and the types of games it supports, its overall investment in gaming content remains steady and unchanged.
This partnership dissolution reflects a pattern within Xbox’s recent corporate strategy. Previous projects like Avalanche’s Contraband were suspended and effectively canceled after similar restructuring and layoffs. Romero Games also faced major redesigns on its upcoming shooter after Xbox scaled back involvement.
Announced in early 2023, Project Fantasy had generated anticipation as an ambitious online role-playing title. IO Interactive reaffirmed that the IP remains a priority. However, it remains unclear if securing a new publishing partner will be necessary to continue development to completion.
The studio also pledged to support employees affected by these decisions during the transition. As layoffs persist across the gaming industry, this development highlights ongoing challenges studios face balancing creative ambition with shifting corporate alliances and financial priorities.