Last week brought the news that Xbox had dropped their support for Project Fantasy the, er, fantasy project in development at IO Interactive. The Hitman maker announced they would remain "100% committed" to the game, and ensure "This wonderful universe will see the light of day", but they also acknowledged that there would need to be layoffs.

IOI have now confirmed that they have been able to regain full ownership of Project Fantasy and they will "continue to develop and fund it independently". But that production has come with a significant cost: the closure of their Istanbul office.

"Following the end of our external finance partnership on Project Fantasy, IOI has regained full ownership of the project and our IP," IOI said in a statement published to X. "We will continue to develop and fund it independently amongst our other projects. With this context, we had to find a new balance for the long-term future of the studio, focused on the success of our main internal core titles instead of external projects and potential mobile game derivatives. This has meant making changes as well as proposed changes across our studios: the closure of our Istanbul studio and starting a process to part ways with colleagues who have been a meaningful part of what makes IOI what it is."

Opened in 2023, IOI described the studio as an effort to "establish a hub for AAA game development in the region".

IOI claim this closure will allow them to "retain the long-term future of IO Interactive as one of the very few fully independent AAA developer and publisher, as well as to give Project Fantasy the best possible foundation to succeed under our own passion and direction."

There are significant risks to taking complete responsibility with Project Fantasy, even for a studio like IO Interactive, which are one of the few independent studios putting out AAA games. While World of Assassination is a big success that continues to sell copies, it's easy to forget that the first season of the Hitman reboot was made while IO was a subsidiary of Square Enix and the sequel, made after buying back their independence, was funded by Warner Bros. Even Hitman 3 was partly funded with a 12-month exclusivity deal with the Epic Games Store.

007: First Light shows IOI can have success with a series other than Hitman, but Bond's obviously a hugely recognised name. So the support of Xbox likely made Project Fantasy a much more palatable risk. And, recent years have shown that IO are also capable of having costly misses. IOI moved into publishing with last year's Mindseye, the open world shooter from Rockstar alum Leslie Benzies. After terrible reviews, several rounds of layoffs, and Benzies making allegations of saboteurs working against his game, IO eventually parted ways with the company.

Among all the terrible news of Microsoft's layoffs, it's been a positive to see studios spun out instead of shuttered and ownership of a project like Project Fantasy given back to IO Interactive rather than cancelled, but it's very much a double-edged sword.