IO Interactive now owns full IP rights for Project Fantasy after its external partner exited. The studio is continuing development but has closed its Istanbul studio and laid off staff as part of a restructuring.
Project Fantasy, an online fantasy RPG from IO Interactive, lost its external publishing partner in late June 2026. The partner, widely reported to be Microsoft's Xbox division, withdrew as part of a broader reassessment of investments at Xbox. IO Interactive stated it owns the IP and remains committed to the project, saying the game will definitely see release.
On July 7, 2026, IO Interactive announced it had acquired full ownership of the IP and project rights for Project Fantasy. The acquisition came after the end of the relationship with the external partner. As part of the restructuring to focus on core titles, IO Interactive will close its Istanbul studio and lay off staff. The studio had previously reorganized the development team and made personnel adjustments following the partnership's end.
Project Fantasy was first announced in 2023 as a new online fantasy RPG designed for long-term expansion. Few details have been revealed since. Documents from the Activision Blizzard acquisition case had previously linked IO Interactive's Project Dragon to an Xbox publishing deal, which outlets identified as the same project.
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IO Interactive has announced it has acquired full ownership of the IP and project rights for Project Fantasy, its online fantasy RPG. The acquisition follows the end of a relationship with an external partner, believed by some media outlets to be Microsoft. The company will continue development and funding, but will close its Istanbul studio and lay off staff as part of a restructuring to focus on core titles.
IO Interactive, the studio behind the Hitman series and the upcoming 007 First Light, announced on July 1, 2026, that its partnership with an external publisher for the online fantasy RPG Project Fantasy has ended. The studio did not name the partner, but Bloomberg and other outlets reported that the partner was Microsoft's Xbox division. An Xbox spokesperson told Bloomberg that the company is reassessing its investments and focusing on top priorities, without denying the withdrawal. The split follows a broader organizational reset at Xbox announced in June 2026, which has led to layoffs and project cancellations across the division. IO Interactive stated that Project Fantasy is an IP it owns and remains fully committed to, saying in a post on X that the game will definitely see release. The studio also confirmed that the development team has been reorganized and that personnel adjustments have occurred as a result of the partnership ending. Project Fantasy was first announced in 2023 as a new online fantasy RPG designed for long-term expansion, with few details revealed since. Documents from the Activision Blizzard acquisition case previously linked IO Interactive's Project Dragon to an Xbox publishing deal, which outlets have identified as the same project.