IO Interactive has confirmed layoffs and the closure of its Istanbul studio following the loss of external funding for its online fantasy RPG, Project Fantasy. The developer, known for its Hitman series and the recent 007 First Light, announced the changes as part of a broader restructuring to ensure the long-term future of the studio as an independent AAA developer.
"Following the end of our external finance partnership on Project Fantasy, IOI has regained full ownership of the project and our IP," the studio stated on X (formerly Twitter). "We will continue to develop and fund it independently amongst our other projects." This shift means the studio must "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 consequences include the closure of the Istanbul studio and a process to "part ways with colleagues who have been a meaningful part of what makes IOI what it is." IO Interactive did not specify the number of employees affected by the layoffs, as the process is ongoing.
Prior to these recent developments, IO Interactive had expanded its global presence, opening studios in Malmö in 2019, Barcelona in 2021, and both Istanbul and Brighton in 2023. The loss of funding for Project Fantasy was revealed last week, with Bloomberg reporting that Microsoft was the external partner involved. This news comes shortly after Microsoft's Xbox division announced significant layoffs and the spinning off of several studios.
The situation is particularly notable given the recent success of 007 First Light, which was released just over a month ago to positive reception and multi-million sales. Despite this commercial success, the game's license holder, Amazon, has not yet committed to future 007 titles with IO Interactive, and a planned Hitman television series was reportedly canceled in March.
"These are hard, but necessary decisions, in order to retain the long-term future of IO Interactive as one of the very few fully independent AAA developers and publishers, as well as to give Project Fantasy the best possible foundation to succeed under our own passion and direction," the studio communicated. IO Interactive expressed its continued commitment to Project Fantasy, a world and intellectual property it intends to develop and fund independently. Momentum has been building for the studio with the successful launch of 007 First Light, a game that arrived over a month ago.