IO Interactive has confirmed layoffs after its publishing partnership for Project Fantasy came to an end.
The developer shared the news in a statement posted to social media, describing the decision as a difficult moment following what had otherwise been a successful period for the studio. According to IO Interactive, the end of the partnership has resulted in “short-term consequences,” including staffing reductions.
“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.”
IO Interactive also made it clear that Project Fantasy has not been canceled. The studio said it remains fully committed to the original fantasy IP and intends to continue development despite losing its publishing partner.
“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.”
What This Means for Project Fantasy
While the statement did not identify the publisher involved, documents made public during the FTC’s case against Microsoft previously listed Xbox Game Studios as the publishing partner for Project Fantasy. Multiple outlets have since reported that Microsoft confirmed Xbox was the partner that exited the agreement.
The announcement also arrives amid reports of broader changes within Microsoft’s gaming business, including layoffs and shifts in publishing strategy. However, IO Interactive did not comment on Microsoft’s plans, instead focusing on the immediate impact the partnership’s end has had on its own studio and employees.
Although the publishing arrangement has changed, Project Fantasy remains in development. IO Interactive says its immediate focus is supporting affected employees while continuing work on the studio’s first original fantasy universe.
