007 First Light and Hitman developer IO Interactive has announced layoffs after an unexpected setback revolving around its upcoming fantasy game, which was reportedly set to be published by Xbox.
The Danish developer took to social media to confirm that a relationship with an “external partner” that was working on the studio’s upcoming fantasy game had ended. As a result, IO Interactive is laying off an unconfirmed number of staff, but it insisted it remained committed to supporting those who are impacted.
It is believed that these layoffs are unrelated to the successful release of 007 First Light, which IOI celebrated in the same post.
Here’s IO’s statement in full:
Dear 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.
Although IO Interactive did not explicitly name the external partner, Project Fantasy was reportedly set to be published by Xbox. According to a leaked document from the FTC vs. Microsoft trial in 2023, Microsoft had the game (then known as Project Dragon) listed as an exclusive for Xbox and PC. It also stated that the title would be published by Xbox Game Studios.
The IOI news also comes ahead what are expected to be significant restructuring at Xbox. Microsoft is planning a “reset” for the Xbox brand, which will reportedly include studio closures, game cancellations, and mass layoffs. Unionized Xbox employees are attempting to push back against the reset and cement protections for staff, but it remains to be seen what will happen.
Cade Onder is a freelancer for IGN’s news team. He covers all things entertainment, including gaming, film, and more. You can find him on Twitter @Cade_Onder.
