IO Interactive regains Fantasy ownership, closes Istanbul

IO Interactive, the developer behind the Hitman series and the recent 007: First Light, has regained full ownership of its upcoming online fantasy role-playing game, Project Fantasy, after Microsoft’s Xbox division ended its publishing and funding partnership. The studio announced on Tuesday, July 7, 2026, that it will now independently fund and develop the game, a decision that comes with significant restructuring, including the closure of its Istanbul studio and layoffs across the company.

The announcement confirms the outcome of a funding loss revealed last week. In a statement posted to social media, the company said the end of the external partnership necessitated a new strategic balance focused on internal core titles over external projects. This shift has resulted in the closure of the Istanbul studio, which opened in 2023 as part of an effort to establish a AAA development hub in the region, and a process to part ways with an unspecified number of employees.

The studio stated its immediate focus is on supporting affected staff and asked the industry community for help in finding new opportunities for them. It described the moves as hard but necessary to preserve IO...