Project Fantasy is not cancelled. IO Interactive has confirmed it will keep developing its online fantasy RPG after Microsoft ended its financial partnership, and the studio now fully owns both the project and the IP.
- IO says it will develop and fund Project Fantasy independently alongside its other projects, including 007 First Light.
- The restructuring comes at a cost: IO is closing its Istanbul studio and cutting jobs as it refocuses on internal core titles.
- There is still no release date, platform list, or pricing, so there is nothing to preorder or wishlist yet.
When IO Interactive announced last week that its relationship with the financial backer of Project Fantasy had ended, the obvious question was whether the game would survive at all. The backer turned out to be Microsoft, and the answer, it seems, is yes. In a new statement, the Hitman and 007 First Light developer has confirmed the online fantasy RPG will carry on, this time entirely under IO’s own roof.
“Following the end of our external finance partnership on Project Fantasy, IOI has regained full ownership of the project and our IP,” the studio said. “We will continue to develop and fund it independently amongst our other projects.”
Why IO Is Going It Alone
The framing from IO is that this is a deliberate reset rather than damage control. The studio says it needed “a new balance for the long-term future,” shifting focus to its main internal core titles instead of external projects and what it describes as “potential mobile game derivatives.” That reads like a studio trimming everything that depended on someone else’s chequebook.
It also positions IO as “one of the very few fully independent AAA developer and publisher,” which is genuinely rare at this scale. Owning Project Fantasy outright means IO controls the roadmap, the platforms, and the IP, without a platform holder’s priorities steering the ship. Given the wider turbulence at Microsoft, that independence looks less like bravado and more like sensible insurance. This is, after all, the same period in which Xbox confirmed 3,200 job cuts and five studio exits, and reports have suggested Microsoft has even considered spinning off Xbox entirely.
The Human Cost of the Reset
The confirmation comes with genuinely bad news attached. IO is closing its Istanbul studio and has started “a process to part ways with colleagues who have been a meaningful part of what makes IOI what it is.” The layoffs were announced shortly after the external partnership ended, and the studio has publicly asked its network to help affected staff find new roles.
IO calls these “hard, but necessary decisions” to secure its long-term future and give Project Fantasy “the best possible foundation to succeed under our own passion and direction.” It is the familiar shape of a studio restructuring: the project survives, but not everyone working on the broader slate does.
What We Actually Know About Project Fantasy
Not a great deal has changed on the game itself. Project Fantasy was first linked to Microsoft back in April 2021, when Windows Central reported IO was working on a “dragon-themed IP” expected to be published as a first-party Xbox exclusive. In 2023, IO confirmed it was building “a new world, a new IP – an online fantasy RPG” designed to “entertain players and expand for many years to come.”
With the Xbox arrangement gone, any assumptions about exclusivity go with it. There is no release date, no platform list, and no pricing, so the only sensible move for anyone interested is to wait for IO’s next update. The studio’s closing line suggests one is coming eventually: “Project Fantasy is a game, a world, and an IP that we are wholly committed to, and we cannot wait to share the love with you.”
FAQ
Is Project Fantasy cancelled after Microsoft ended its partnership with IO Interactive?
No. IO Interactive has confirmed Project Fantasy will continue in development. The studio has regained full ownership of the project and its IP, and will fund it independently alongside its other titles.
Will Project Fantasy still be an Xbox exclusive?
That is no longer clear. The game was originally reported as a first-party Xbox exclusive under Microsoft's backing, but with that partnership over, IO has not announced any platforms. No platform list has been confirmed.
What is Project Fantasy?
Project Fantasy is a new IP from IO Interactive, described by the studio as an online fantasy RPG built to expand over many years. It has been in development for several years, with no release date announced yet.
Why is IO Interactive cutting jobs and closing its Istanbul studio?
IO says the changes are part of a restructuring to focus on its main internal core titles instead of external projects, following the end of its financial partnership with Microsoft. The studio calls them hard but necessary decisions for its long-term future as an independent AAA developer and publisher.