Waterdeep-set Project Fantasy to continue as IO Interactive shuts Istanbul studio
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IO Interactive, the studio behind the Hitman series, has confirmed it will continue developing its fantasy RPG, Project Fantasy, independently after Xbox withdrew its financial backing. The move matters because it keeps a major project alive and preserves IOI's status as one of the few fully independent AAA developers and publishers, but it has come at a heavy price: the closure of the studio's Istanbul office and layoffs among staff. Having regained full ownership of the project and its intellectual property, IOI says it will now fund the game itself alongside its other titles.
The Istanbul studio, opened in 2023, had been intended as a regional hub for AAA game development. IOI framed the closure as a way to refocus on its core internal titles rather than external projects and potential mobile spin-offs. The article notes the considerable risk in shouldering Project Fantasy alone: past Hitman games were variously funded by Square Enix, Warner Bros and an Epic Games Store exclusivity deal, while the studio's recent publishing venture, Leslie Benzies' Mindseye, flopped badly amid poor reviews, layoffs and a subsequent parting of ways. IOI's other non-Hitman effort, the Bond game 007: First Light, benefits from an established brand, underlining how Xbox's support had made Project Fantasy a more palatable gamble.
- IOI will fund Waterdeep-set Project Fantasy independently after Xbox pulled out.
- Its Istanbul studio is closing, with layoffs following.
- IOI regains full ownership of the project and its IP.
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Project Fantasy is a fantasy role-playing video game set in the city of Waterdeep, drawn from the Dungeons & Dragons universe. It is being made by IO Interactive (IOI), a Danish studio best known for the Hitman assassination games. Unlike most big-budget titles, which are usually paid for and published by large publishers such as Square Enix or Warner Bros, IOI has spent recent years building itself up as one of the few major game studios that is fully independent, funding and publishing its own work.
Microsoft's Xbox division had been providing financial backing for Project Fantasy, which is a common arrangement in the games industry where a large company funds development in exchange for a stake in how the finished game is released. IOI also opened a studio in Istanbul in 2023 as part of its expansion plans, intended to support this kind of larger, externally backed project work alongside its main Hitman-focused teams.
This background matters because IOI now finds itself needing to pay for Project Fantasy's development itself after losing that outside funding, a costly undertaking for a studio of its size. It also follows a difficult period for IOI beyond this one game, including a poorly received publishing venture and job losses, all of which shapes how significant a decision to keep the project going alone actually is.
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Originally published by Rock Paper Shotgun as “After split with Xbox, Hitman developer IO will “continue to develop” Project Fantasy independently, but they’re closing their Istanbul Studio”.