IO Interactive is closing its Istanbul studio and laying off an undisclosed number of employees after Xbox withdrew its funding and publishing agreement for the studio’s in-development online RPG, Project Fantasy. It’s one of the secondary effects of Microsoft pulling back in its gaming efforts with the Monday announcement of the unloading of five studios and up to 3,200 layoffs during the coming year. The Danish developer, best known for the Hitman franchise and last year’s 007 First Light, announced the closure Monday in a statement posted to X, saying it had “regained full ownership” of Project Fantasy and its intellectual property following “the end of our external finance partnership” on the game. IOI did not name Xbox directly, but Bloomberg reported in late June that Xbox was the partner in question. “This has meant making changes as well as proposed changes across our studios: the closure of our Istanbul studio and starting a process to part ways with colleagues who have been a meaningful part of what makes IOI what it is,” the company said. IOI Istanbul opened in 2023 in the city’s Sarıyer district as a foothold for AAA development in Turkey, according to the studio. It contributed to 007 First Light, upcoming Hitman titles and Project Fantasy. Its closure reduces the number of studios contributing to Project Fantasy from five to four, according to IOI’s original production breakdown. The company is based in Copenhagen and also operates studios in Brighton, Barcelona and Malmö. IOI said it will…
