Xbox Pulls Out of ‘Project Fantasy’ Video Game From IO Interactive

June 30, 2026 - 19:00

Microsoft's Xbox division has stepped away from "Project Fantasy," the upcoming video game from IO Interactive, the studio behind the "Hitman" series and the recently announced "007: First Light." The decision marks a significant shift in the partnership between the two companies, which had originally planned for Xbox to publish the new title.

IO Interactive confirmed the split in a brief statement, noting that the studio will now self-publish "Project Fantasy" and retain full ownership of the intellectual property. The game, which has been described as a narrative-driven fantasy RPG, was first revealed in 2023 as part of a broader collaboration with Xbox Game Studios. At the time, IO Interactive said the project would allow them to explore a new genre while leveraging their expertise in immersive world-building.

Industry analysts suggest the pullout may be part of a broader realignment at Xbox, which has recently focused on fewer, larger releases and tighter budget controls. For IO Interactive, the move allows them to maintain creative independence. The studio has a track record of successful self-publishing, particularly with the "Hitman" series.

No new release date for "Project Fantasy" has been announced. The game remains in early development, and IO Interactive says it will share more details when ready.