Conceptual art for IO Interactive's Project Fantasy

IO Interactive, the studio celebrated for the Hitman series and 007 First Light, is facing internal restructuring following a significant shift in its development roadmap. The studio’s ambitious online RPG, currently codenamed Project Fantasy, is undergoing changes after its partnership with a key external collaborator came to an abrupt end.

In an official statement, IO Interactive confirmed the fallout: “The relationship with an external partner regarding our proprietary IP, Project Fantasy, has concluded. We are currently navigating the immediate consequences of this decision, which includes necessary staffing adjustments. Our primary focus remains supporting our talented team members through this difficult transition.”

While IO Interactive did not name the partner, Bloomberg has verified that Microsoft’s Xbox division was the primary financier. Following a internal re-evaluation of its portfolio, Xbox has withdrawn its support. An Xbox representative clarified that this move does not signal a retreat from the gaming market, but rather a strategic pivot in their investment philosophy regarding the specific types of projects they choose to back.

Despite this major hurdle, IO Interactive remains steadfast in its vision for Project Fantasy. “This is a world and an IP we are deeply passionate about,” the studio noted. “We remain fully committed to this project and are confident that this unique universe will eventually see the light of day.”

First teased in early 2023, Project Fantasy is described as a long-term, evolving experience. IO Interactive has previously characterized the project as a nostalgic love letter to the fantasy genre, drawing inspiration from tabletop gaming sessions and classic adventure books—blending the roles of storyteller, guide, and creator.

This development arrives shortly after the studio’s successful launch of 007 First Light, which garnered praise for its cinematic execution and strong commercial performance. You can read our full review of that title here.