IO Interactive, the studio behind Hitman and 007: First Light, has announced a fresh round of layoffs after the development of Project Fantasy was impacted by the end of a partnership reportedly linked to XBOX.

In a message on its X page, IO Interactive revealed that the development of its upcoming game, Project Fantasy, has taken an unexpected turn after its relationship with an external partner ended. Bloomberg later reported that the unnamed partner was XBOX.

"We're not reducing our overall investment in games. We expect to invest about the same in content as we did last year." An XBOX spokesperson told Bloomberg.

"What's changing is where we're investing and the kinds of projects we're backing."

Project Fantasy was perhaps set to be published by the Microsoft-owned company, but now IO Interactive may be forced to take another route. This means either finding another publisher or doing it independently.

Through the official post, IO Interactive promised that they are committed to helping employees as they exit the organization.

Furthermore, the developer also assured fans that Project Fantasy will still be a priority for the company. Not much is known about the new IP; however, it's supposed to be an online dragon-themed RPG.

A report from Windows Central in 2021 even suggested that it was going to be an XBOX exclusive. However, this may no longer be the case with the company's exit.

More information regarding the upcoming title is awaited. Meanwhile, XBOX continues to deliver on the reset promised by CEO Asha Sharma.

XBOX reportedly considering axing major studios yet again

Recently, CEO Asha Sharma announced a reset which will be observed over the following 100 days. Soon after, reports of studio closures and layoffs began surfacing according to The Verge.

Nothing has been confirmed as of yet, but grey clouds loom over many studios and games. The prime example here is Arkane Studios.

The developer behind games like Deathloop and the Dishonored series is facing a potential shutdown, according to The Verge. All of this while it develops Marvel's Blade, which has been delayed until 2027 and is reportedly overbudget.

XBOX may sell the studio to another buyer or spin it off. Similar fates await other studios such as Double Fine, Compulsion Games, and Ninja Theory.

Furthermore, new reports also suggest that Undead Labs may also be at risk. The studio is currently developing State of Decay 3, which was even showcased at the recent XBOX Games Showcase.

Overall, the situation with XBOX appears dire. The number of layoffs and studios that may get shut down remains unclear. However, industry reports suggest major changes, which is very concerning for many.

Which XBOX studio do you think is most at risk amid the ongoing restructuring? Share your opinion in the comments.

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Written by

Prit Chauhan

Edited by

Pulkit Prabhav