IO Interactive lays off staff after Microsoft exits Project Fantasy publishing deal

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IO Interactive, the studio known for the Hitman series and 007 First Light, has announced layoffs following the collapse of a partnership with an external collaborator on its upcoming title, Project Fantasy. The online fantasy RPG lost its prospective publisher after Microsoft withdrew, reportedly as part of broader cost-cutting measures tied to an Xbox business restructuring. The exact number of employees affected by the layoffs has not been disclosed by the studio. IO Interactive stated it remains committed to supporting impacted staff through the transition. Despite the setback, the company indicated that development on its next franchise will continue.

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