IO Interactive Keeps Project Fantasy Alive After Funding Deal Ends
IO Interactive is moving forward with Project Fantasy as a fully self funded game after the end of its external finance partnership, but the decision comes with a painful cost. In an official IO Interactive statement, the studio confirmed that it has regained full ownership of Project Fantasy and its intellectual property, while also announcing the planned closure of its Istanbul studio and a process that will see affected employees leave the company.
The situation follows recent reporting that Xbox had ended its involvement with Project Fantasy as part of a wider business reset, with Bloomberg linked reporting identifying Microsoft’s gaming division as the former external partner. IO Interactive itself has not named Xbox in its statement, instead referring only to the end of an external finance partnership.
"Project Fantasy is a game, a world, and an IP that we are wholly committed to."
— IO Interactive
The closure of IOI Istanbul is especially notable because the studio opened in 2023 as part of IO Interactive’s wider international expansion. The company described the move as necessary to find a new balance for its long term future, with a stronger focus on its main internal core titles rather than external projects and possible mobile derivatives. IOI also asked the wider games industry to support affected employees by sharing opportunities for those looking for new roles.
Project Fantasy remains one of IO Interactive’s most ambitious projects. On the official Project Fantasy page, the studio describes the game as a bold new online fantasy RPG built to entertain players and expand over many years. The early concept art and studio comments point toward a classic fantasy world built around party based adventure, diverse characters, large landscapes, armor, weapons, and a brighter heroic tone rather than a grim fantasy setting.
IO Interactive has also said the project is partly inspired by the Fighting Fantasy books, as well as the tabletop feeling of different characters working together toward a shared goal. That is a major creative shift for a studio best known for Hitman, where stealth, systems design, assassination sandboxes, and solo player experimentation defined its identity for more than 2 decades.
The timing is difficult because IO Interactive recently scored a major win with 007 First Light, selling 1.5 million copies in under 24 hours, marking the studio’s strongest move beyond Hitman in years and reaching 2.7 million copies sold but had not broken even yet, showing that even a successful AAA launch can still carry heavy development and publishing pressure.
That makes the Project Fantasy decision more strategic than symbolic. IO Interactive wants to remain one of the few fully independent AAA developer and publisher operations in the industry, but independence requires financial discipline. By keeping full ownership of Project Fantasy, IOI protects the long term upside of the IP. By closing Istanbul and reducing staff, it is also accepting the immediate cost of carrying that ambition without external funding.
Project Fantasy is now a high stakes independence test for IO Interactive. The studio has already survived one major corporate split in its history after leaving Square Enix and rebuilding Hitman into a modern live platform. Now it is facing a different version of the same challenge, but with a new fantasy IP, a larger AAA market, and far less room for financial error.
The good news is that full ownership gives IO Interactive complete creative control. If Project Fantasy succeeds, IOI owns the world, the technology direction, the community growth, and the long term franchise upside. The risk is that online RPGs are expensive, slow to build, and difficult to sustain. Without Xbox funding, IOI will need to be extremely careful with scope, launch timing, live operations, and player retention.
For the wider industry, this is another reminder that the AAA market is becoming more unforgiving. Even respected independent studios with successful brands are being forced to make hard structural decisions. Project Fantasy may still become IO Interactive’s next major evolution, but the road to get there has clearly become much harder.
Do you think IO Interactive is making the right move by self funding Project Fantasy, or should the studio have paused the game after losing external support?
