Hitman and 007 First Light developer IO Interactive has announced layoffs following the end of a relationship with an external partner working on its upcoming fantasy title, Project Fantasy. The studio confirmed the split on social media, noting that it now faces “short-term consequences” including staffing reductions. The number of affected employees was not disclosed, but IO Interactive stated it is fully committed to supporting those impacted by the transition.

Layoffs and Immediate Impact

The Danish studio emphasized that the layoffs are unrelated to the successful launch of 007 First Light, which the same post celebrated. The full statement acknowledged the positive reception of the Bond game while explaining that the loss of the external partner forced the studio to adapt. IO Interactive reiterated its commitment to the Project Fantasy IP, calling it “a game, a world, and an IP that we absolutely love and remain 100% committed to, now and in the future.”

Project Fantasy’s Future

Although IO Interactive did not name the partner, Project Fantasy was reportedly set to be published by Xbox. A leaked document from the 2023 FTC v. Microsoft trial listed the game—then codenamed Project Dragon—as an Xbox and PC exclusive published by Xbox Game Studios. Despite the partnership ending, IO Interactive insisted that the fantasy IP will still see release, though no new timeline was provided.

Broader Industry Context

The layoff news arrives amid widespread restructuring expectations at Xbox. Microsoft has reportedly planned a “reset” for the brand, which could include studio closures, game cancellations, and mass layoffs. In response, unionized Xbox employees have been mobilizing to resist the planned cuts and secure protections for staff, creating an uncertain environment for publisher-studio relationships. IO Interactive’s split with its external partner may reflect these broader shifts, though the studio has not linked the two.

About 007 First Light

Step into the polished world of espionage with 007 First Light, a title that blends stealth and cinematic action in a tight single-player narrative.

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