IO Interactive, the Danish studio behind the Hitman series and the forthcoming 007: First Light, has confirmed job losses and the closure of its Istanbul studio after Xbox withdrew funding for its in-development online role-playing game, Project Fantasy. The studio said it has nonetheless regained full ownership of the project and will continue to develop and fund it independently, framing the cuts as difficult but necessary to protect its long-term future as one of the few fully independent AAA developers and publishers.

In a statement on X, IOI said it needed to "find a new balance" focused on its main internal titles, pledged to support affected staff and asked for help placing them in new roles. The Istanbul studio, IOI's fourth, was opened in 2023 to support AAA productions such as 007: First Light, while the company retains offices in Copenhagen, Malmö, Barcelona and Brighton. The layoffs form part of wider cuts under new Xbox CEO Asha Sharma, who described Microsoft's gaming business as "not healthy" and on Monday announced 1,600 job cuts, a further 1,600 over the next year, and the sale or divestment of five studios: Double Fine, Ninja Theory, Compulsion Games, Undead Labs and Arkane.