- Primary Subject: IO Interactive Layoffs
- Key Update: IO Interactive is implementing layoffs due to a collapsed external partnership for Project Fantasy.
- Status: Update
- Last Verified: 2026-06-30
- Quick Answer: IO Interactive is facing staff layoffs after a significant partnership for their game Project Fantasy fell through.
IO Interactive has revealed that the studio is preparing for staff layoffs following the breakdown of a relationship with an external partner.
The studio behind the highly successful 007: First Light was working on a new title called Project Fantasy, and while the external partner was not explicitly mentioned, all signs point to it being Xbox, as the announcement came the same day as Xbox’s fiscal year ends, which has given fans a peek into the bleak short-term future of the company.
The short social media post made by IOI states that the studio will now have to adapt to this new reality. They haven’t confirmed how many employees will be affected:
“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.”
It’s a sour note in an otherwise great year for IO, with First Light selling over 3 million copies in just two weeks. As for Xbox, CEO Asha Sharma warned the Xbox Reset initiative would come with difficult decisions on al fronts, including massive layoffs and potential studio shutdowns. It seems we’re looking at the start of that.
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