Xbox Reshuffle Results in Layoffs IO Interactive After "Project Fantasy" Funding Pulled
1 July 2026 at 03:47
It's now been widely reported that Xbox Game Studios is undergoing massive changes, with looming mass layoffs and potential studio closures slated for early July. Now, it seems as though there will also be collateral damage at other studios, as IO Interactive, the studio that recently published the wildly successful James Bond 007: First Light, announced on June 30 that it would be conducting layoffs at the studio. This comes after "a relationship with an external partner on our own IP, Project Fantasy, has come to an end," and although IO Interactive does not name the external partner, a Bloomberg report following the post confirmed that the partner in question was Xbox. According to Bloomberg's Jason Schreier, Xbox was slated to fund and publish the development of the game, but has pulled funding as part of its recent reshuffle, which has led to a number of financial and investment decisions being reconsidered. The full statement from IO Interactive follows.
IO Interactive on XDear gaming community,
For a good while, it has been all positive news from IO Interactive. We remain humbled and honored by the response to our latest outing with a young, unproven Bond. A bold new story and a take on one of the most famous characters in entertainment, which the world has embraced with love.
However, today we have to share some more downbeat news. A relationship with an external partner on our own IP, Project Fantasy, has come to an end. This means we have to adapt to this new reality and its short-term consequences, including staffing decisions, which is what is happening as we write this update, and we are fully committed to supporting those affected through this challenging transition.
Project Fantasy is a game, a world, and an IP that we absolutely love and remain 100% committed to, now and in the future. This wonderful universe will see the light of day.
