Xbox Ends Project Fantasy Funding Deal With IO Interactive

Xbox, the gaming unit of Microsoft Corp, has ended its deal to fund and publish IO Interactive's upcoming game Project Fantasy, as the company re-evaluates its investment decisions. Xbox said it is 'taking a fresh look at where we invest so we're focusing on our highest priorities,' according to a spokesperson statement to Bloomberg News, while maintaining that overall gaming spending will remain steady. The move comes as Xbox prepares for significant job cuts in July under new Chief Executive Officer Asha Sharma, who took over the role in February. IO Interactive confirmed it will continue developing Project Fantasy but must now seek alternative funding or self-publish the title, and said it will 'adapt to this new reality,' including potential short-term staffing changes.

Xbox Shifts Investment Focus While Maintaining Spending Levels

Xbox stated it is 'not reducing our overall investment in games,' and expects to 'invest about the same in content as we did last year,' according to the spokesperson statement. The company emphasized that 'what's changing is where we're investing and the kinds of projects we're backing.' The decision affects the funding arrangement for Project Fantasy, which was first announced in early 2023.

IO Interactive Commits to Project Fantasy Development

IO Interactive said in a post on X that it has 'to adapt to this new reality and its short-term consequences, including staffing decisions,' following the end of its relationship with an external partner on Project Fantasy. The studio confirmed it remains '100% committed' to the project and said it will continue development of the game and its underlying IP. IO Interactive's 007 First Light, released in May, has sold more than three million copies.

Xbox Plans July Layoffs Under New CEO Leadership

Xbox is preparing for significant job cuts in July as part of a broader restructuring under Asha Sharma, who took over as Chief Executive Officer in February. The exact scale of the layoffs has not yet been disclosed. Xbox is also reportedly planning to significantly reduce spending on marketing and other operational areas.

FAQ

What did Xbox announce about Project Fantasy?

Xbox ended its deal to fund and publish IO Interactive's Project Fantasy. Xbox stated it is 'taking a fresh look at where we invest so we're focusing on our highest priorities,' according to a spokesperson statement to Bloomberg News, while maintaining overall gaming spending at the same level as last year.

How did IO Interactive respond to the funding deal termination?

IO Interactive confirmed it remains '100% committed' to Project Fantasy and will continue developing the game and its underlying IP. The studio said it has 'to adapt to this new reality and its short-term consequences, including staffing decisions,' and will need to seek alternative funding or self-publish the title.