{"id":1620942,"date":"2026-06-30T19:36:31","date_gmt":"2026-06-30T19:36:31","guid":{"rendered":"http:\/\/LFKhFYpL9sgW74QTXJP8Pe"},"modified":"2026-06-30T19:36:31","modified_gmt":"2026-06-30T19:36:31","slug":"ahead-of-next-weeks-expected-xbox-bloodbath-io-interactive-loses-funding-for-its-online-fantasy-rpg","status":"publish","type":"post","link":"https:\/\/arcader.org\/news\/ahead-of-next-weeks-expected-xbox-bloodbath-io-interactive-loses-funding-for-its-online-fantasy-rpg\/","title":{"rendered":"Ahead of next week&#8217;s expected Xbox bloodbath, IO Interactive loses funding for its online fantasy RPG"},"content":{"rendered":"<article>\n<p>Just over a month after the successful launch of <a href=\"https:\/\/www.pcgamer.com\/007-first-light\/\" target=\"_blank\">007 First Light<\/a>, the fastest selling game in its history, IO Interactive has run into some unexpected bad news about another project it&#8217;s had in development for years. An &#8220;external partner&#8221; pulled funding from <a href=\"https:\/\/www.pcgamer.com\/hitmans-developer-just-announced-its-next-project-an-online-fantasy-rpg\/\" target=\"_blank\">Project Fantasy<\/a>, an &#8220;online fantasy RPG&#8221; IO announced in 2023, and it sounds like layoffs at the studio are imminent as a result.<\/p>\n<p>&#8220;For a good while, it has been all positive news from IO Interactive,&#8221; the studio wrote on <a href=\"https:\/\/x.com\/IOInteractive\/status\/2072005107797893315\">X<\/a>. &#8220;&#8221;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.&#8221;<\/p>\n<figure class=\"van-image-figure inline-layout\" data-bordeaux-image-check >\n<div class='image-full-width-wrapper'>\n<div class='image-widthsetter' style=\"max-width:945px;\">\n<p class=\"vanilla-image-block\" style=\"padding-top:94.18%;\"><img loading=\"lazy\" decoding=\"async\" id=\"De4oVLkFfboqQ9FKNuFw46\" name=\"ioi1\" alt=\"IO Intertactive tweet text: 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.\" src=\"https:\/\/arcader.org\/wp-content\/uploads\/2026\/06\/ahead-of-next-weeks-expected-xbox-bloodbath-io-interactive-loses-funding-for-its-online-fantasy-rpg.png\" mos=\"\" align=\"middle\" fullscreen=\"1\" width=\"945\" height=\"890\" attribution=\"\" endorsement=\"\" class=\"inline expandable\"><a href='https:\/\/arcader.org\/wp-content\/uploads\/2026\/06\/ahead-of-next-weeks-expected-xbox-bloodbath-io-interactive-loses-funding-for-its-online-fantasy-rpg.png' target='_blank' class='expand-button icon-expand-image icon' ><\/a><\/p>\n<\/div>\n<\/div><figcaption itemprop=\"caption description\" class=\" inline-layout\"><span class=\"credit\" itemprop=\"copyrightHolder\">(Image credit: IO Interactive (Twitter))<\/span><\/figcaption><\/figure>\n<p>The comment about &#8220;staffing decisions&#8221; leaps out\u2014it&#8217;s not a confirmation of layoffs, but it certainly hints at them. IOI did not name the &#8220;external partner&#8221; in question, but it was widely assumed to be Microsoft, and the company confirmed that it was indeed the partner in question in a statement to <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2026-06-30\/microsoft-s-xbox-pulls-out-of-project-fantasy-video-game-from-io-interactive\" target=\"_blank\">Bloomberg<\/a>, saying it is &#8220;taking a fresh look at where we invest so we\u2019re focusing on our highest priorities.&#8221;<\/p>\n<p>Microsoft&#8217;s Xbox division is eyeballing major layoffs and possible multiple studio closures as part of its <a href=\"https:\/\/www.pcgamer.com\/gaming-industry\/double-fine-ninja-theory-and-more-xbox-studios-reportedly-at-risk-of-closure\/\" target=\"_blank\">reset<\/a>, which is expected to begin in early July, and that could also mean ending more publishing partnerships with external studios like IOI. We saw that happen in the wake of major layoffs in 2025: While Microsoft was not named in either case, reports at the time indicated that it had ended funding for projects at both <a href=\"https:\/\/www.pcgamer.com\/gaming-industry\/romero-games-new-shooter-loses-funding-the-studio-may-be-closing-and-it-looks-like-microsoft-is-to-blame\/\" target=\"_blank\">Romero Games<\/a> and <a href=\"https:\/\/www.pcgamer.com\/gaming-industry\/it-looks-like-microsofts-cuts-got-another-one-avalanche-has-stopped-work-on-its-1970s-smuggling-sim-contraband-to-evaluate-the-projects-future\/\" target=\"_blank\">Avalanche Studios<\/a>, throwing both into turmoil.<\/p>\n<p>Romero Games co-founder John Romero <a href=\"https:\/\/x.com\/romero\/status\/2072009030038360529\" target=\"_blank\">commented<\/a> on IO Interactive&#8217;s situation, writing, &#8220;As a company, we&#8217;ve been there, and it&#8217;s extremely difficult.&#8221;<\/p>\n<figure class=\"van-image-figure inline-layout\" data-bordeaux-image-check >\n<div class='image-full-width-wrapper'>\n<div class='image-widthsetter' style=\"max-width:945px;\">\n<p class=\"vanilla-image-block\" style=\"padding-top:33.65%;\"><img loading=\"lazy\" decoding=\"async\" id=\"o6UasHs6eqE4NAMCQbqxw5\" name=\"ioi2\" alt=\"John Romero tweet text: The people at IO Interactive have made some of my favorite games. I'm sorry to hear this news. As a company, we've been there, and it's extremely difficult. Hoping you and Project Fantasy can find a way forward.\" src=\"https:\/\/arcader.org\/wp-content\/uploads\/2026\/06\/ahead-of-next-weeks-expected-xbox-bloodbath-io-interactive-loses-funding-for-its-online-fantasy-rpg-1.png\" mos=\"\" align=\"middle\" fullscreen=\"1\" width=\"945\" height=\"318\" attribution=\"\" endorsement=\"\" class=\"inline expandable\"><a href='https:\/\/arcader.org\/wp-content\/uploads\/2026\/06\/ahead-of-next-weeks-expected-xbox-bloodbath-io-interactive-loses-funding-for-its-online-fantasy-rpg-1.png' target='_blank' class='expand-button icon-expand-image icon' ><\/a><\/p>\n<\/div>\n<\/div><figcaption itemprop=\"caption description\" class=\" inline-layout\"><span class=\"credit\" itemprop=\"copyrightHolder\">(Image credit: John Romero (Twitter))<\/span><\/figcaption><\/figure>\n<p>It&#8217;s also notable that in 2021, IO Interactive was reportedly working with Microsoft on a fantasy game codenamed <a href=\"https:\/\/www.pcgamer.com\/io-interactive-is-reportedly-developing-a-new-fantasy-project-for-xbox\/\" target=\"_blank\">Project Dragon<\/a>. It&#8217;s not known whether Project Dragon eventually evolved into Project Fantasy, but IO Interactive CEO Hakan Abrak teased at the time that &#8220;we have a third universe that we&#8217;re working actively on, which is a bit different and absolutely a love child,&#8221; adding, &#8220;It is something our core people, our veteran staff, have been dreaming about for some time.&#8221; <\/p>\n<p>Despite the sudden change, IO Interactive said it remains &#8220;100% committed&#8221; to Project Fantasy, and promised that &#8220;this wonderful world will see the light of day.&#8221; Given the current state of the videogame industry, which will only get worse if and when the expected axe falls on Xbox, I wouldn&#8217;t count on that happening anytime soon.<\/p>\n<p>IO Interactive declined to comment.<\/p>\n<\/article>\n<p><a href=\"https:\/\/www.pcgamer.com\/gaming-industry\/ahead-of-next-weeks-expected-xbox-bloodbath-io-interactive-loses-funding-for-its-online-fantasy-rpg\/\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Just over a month after the successful launch of 007 First Light, the fastest selling game in its history, IO Interactive has run into some unexpected bad news about another project it&#8217;s had in development for years. An &#8220;external partner&#8221; pulled funding from Project Fantasy, an &#8220;online fantasy RPG&#8221; IO announced in 2023, and it sounds like layoffs at the studio are imminent as a result. &#8220;For a good while, it has been all positive news from IO Interactive,&#8221; the studio wrote on X. &#8220;&#8221;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,&hellip;<\/p>\n<p class=\"excerpt-more\"><a class=\"blog-excerpt button\" href=\"https:\/\/arcader.org\/news\/ahead-of-next-weeks-expected-xbox-bloodbath-io-interactive-loses-funding-for-its-online-fantasy-rpg\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":1620943,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[336],"tags":[5491],"class_list":["post-1620942","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pc-gamer","tag-gaming-industry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Ahead of next week&#039;s expected Xbox bloodbath, IO Interactive loses funding for its online fantasy RPG | Arcader News<\/title>\n<meta name=\"description\" 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