IO Interactive Regains Project Fantasy, But Announces Painful Layoffs & Istanbul Studio Closure

Just a day after XBOX unveiled its biggest restructuring in history, slashing 3,200 jobs, spinning off multiple studios, and appointing its first-ever Chief Operating Officer, another major game developer has announced painful changes of its own.

This time, it’s IO Interactive, the studio best known for the Hitman franchise, has confirmed layoffs and the closure of one of its development studios as it reshapes its future around Project Fantasy.

IO Interactive says Project Fantasy remains a priority despite restructuring

In a statement shared with the gaming community on X, IO Interactive confirmed that it has regained full ownership of Project Fantasy after its external financing partnership came to an end. The studio said it will now continue developing and funding the upcoming fantasy IP entirely on its own alongside its other internal projects.

That being said, the shift also forced IO Interactive to rethink how it allocates resources across the company. As part of that process, the studio confirmed it is shutting down its Istanbul office while also beginning the process of parting ways with employees across the business.

The company described the decision as difficult but necessary, explaining that it wants to focus its long-term investments on internally developed AAA games instead of external projects and potential mobile game spin-offs.

IO Interactive also asked the wider gaming community to help affected developers find new opportunities, encouraging studios and recruiters to reach out if suitable positions become available.

Speaking of Project Fantasy, the company reiterated that the project remains a core part of its future. According to IO Interactive, regaining complete ownership gives the studio greater creative freedom and a stronger foundation to build the new IP on its own terms.

The announcement adds to a growing wave of restructuring across the gaming industry. Over the past week alone, XBOX confirmed sweeping organizational changes, while several studios have also announced layoffs as publishers continue adjusting budgets, development priorities, and long-term strategies amid rising production costs.