IO Interactive is closing its Istanbul studio and laying off developers. The Hitman and 007 First Light studio announced the cuts in a statement posted Monday, and the trigger is the end of the external finance partnership behind Project Fantasy, IOI's in-development online fantasy RPG. The silver lining, if you're hunting for one: IOI now owns the project outright.
In the statement, IOI confirmed it has "regained full ownership of the project and our IP" and will "continue to develop and fund it independently amongst our other projects." That independence comes at a price. "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," the statement reads.
The changes: "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." IOI didn't put a number on the layoffs. The studio called them "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," and stressed that "Project Fantasy is a game, a world, and an IP that we are wholly committed to."
The rest of the statement focuses on the people affected. IOI says its "immediate focus is on supporting those affected as best we can through this period," and it asked the wider industry to flag job openings for the developers now looking for work.
You'll notice the statement never names the partner who walked. Bloomberg identified Xbox as Project Fantasy's publisher in late June, when VGC reported that IOI was preparing for layoffs as the deal wound down and the paper trail goes back further than that.
Windows Central first reported in April 2021 that IOI had teamed with Microsoft on a "dragon-themed IP," internal documents from the FTC v. Microsoft trial in 2023 pointed to the game being planned as an Xbox exclusive, and IOI itself confirmed the project in 2023, describing an online fantasy RPG built as its own original IP.
IOI Istanbul opened in 2023 as the studio's AAA development hub in Turkey, and Game Developer notes it was expected to play a significant role on 007 First Light, Hitman, and Project Fantasy. It didn't make it to its fourth birthday.
Why Should Xbox's Other Partners Be Paying Attention?
Xbox has spent the past week confirming studio closures and cancellations inside its own walls, days after a leak named five internal studios and reportedly killed Marvel's Blade. Til now the damage has stayed on Microsoft's payroll. This is the first big cut to happen OUTSIDE the company: a fully independent studio closing an office and laying off developers because Xbox pulled its money. Any team building an unannounced project on Xbox funding now knows how fast that support can vanish.
Self-funding an online RPG is a monumental task, even for a studio coming off a monster launch. 007 First Light launched on May 27th and sold 1.5 million copies in its first 24 hours, the fastest-selling game in IOI's history. That success is the war chest this whole plan leans on.
IOI is now carrying Bond's post-launch roadmap, the future of Hitman, AND a self-funded Project Fantasy all at once. If Bond keeps selling, the plan works. If it doesn't, there's no publisher safety net left.
IOI Has Survived A Publisher Pullout Before
This is also familiar territory for the Danish developer. Back in 2017, Square Enix cut IOI loose, and the studio's management bought the company out and kept the rights to Hitman and Freedom Fighters. That moment looked grim at the time too, and it led directly to the Hitman: World of Assassination trilogy, the James Bond license, and the biggest launch in studio history. A publisher pulling out hasn't killed IOI yet!
Do you trust IOI to carry Bond, Hitman, and a self-funded Project Fantasy all at once? Let us know in the comments below!
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