# Microsoft's Xbox Pulls Out of Project Fantasy Video Game From IO Interactive

> **Newsylist Open Intelligence Dossier** · First detected: 2026-06-30 17:00 UTC · Category: Technology · Sources: 15 · Current Velocity: 14.52

## Executive Summary
Microsoft's Xbox has withdrawn funding and partnership from IO Interactive's upcoming online fantasy RPG project.

## Intelligence Brief
Microsoft's Xbox has pulled out of a project involving an online fantasy RPG developed by IO Interactive. Following the loss of this external partner and funding, IO Interactive has announced staff layoffs.


Coverage from Bloomberg, IGN, and Kotaku emphasizes the loss of the partnership, while PC Gamer links the move to expected Xbox cuts. The Verge notes that IO Interactive is the developer behind 007 First Light.


IO Interactive claims that its next franchise will continue despite the layoffs and the loss of the publisher's support.

## Verified Facts & Key Claims
### What happened to IO Interactive's fantasy game?
Microsoft's Xbox pulled out of the project, leading to a loss of funding and an external partner.

### How has this affected IO Interactive's workforce?
The company has announced layoffs following the publisher's decision to pull the plug on the fantasy game.

### Is IO Interactive stopping development on new franchises?
No, the developer claims its next franchise will continue.

## Key People, Organizations & Locations
First, RPG, Ahead, IO Interactive, Microsoft's Xbox Pulls Out of Project Fantasy Video Game From IO Interactive, IO Interactive's Fantasy IP Loses External Partner Amid Xbox Cuts, IO Interactive Announces Layoffs After Publisher Pulls the Plug, Fantasy Game

## Multi-Source Evidence Table
| Source Outlet | Headline | Published (UTC) | Verification URL |
|---|---|---|---|
| GamesIndustry.biz | Xbox ends deal to fund and publish IO Interactive's Project Fantasy; redundancies expected | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMiugFBVV95cUxPcnVsdERWTmZNaU9YQWFfWGs0MlJVUWF0OTZfeThaajYyM25ObnZfWnZObW0xOHNJeXY5TkRWN041T0V5c3l5ZVlGVktyYmV0anZjZzljb0FKRzBZMHlONXNpV1dlT21kejlBV1NQNVpjVGNRdll4QXlmU3ZnQTI2MXB6alczSFdtUW1QSzRkS2NkbXAyTVo2U0xrXzFubld0QWs0b25COGlSb1NxSzFiUVRibW1oMElQY1E?oc=5) |
| Aftermath | Xbox Cuts, Which Haven't Even Happened Yet, Are Already Causing Turmoil In The Games Industry | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMiZ0FVX3lxTE10dlY4LXhGaE5aVUxYVm1Cd09sN3BMUndtNUtTVGdqc3dfY3pJZ2l6V1g2V24zS3B6RjlrRV9tcmdEdy1CZ0ZyQ3kzU1lwZWNsbUxEaEdzNjR5NVU3cU9IOUQtWXIybFE?oc=5) |
| Insider Gaming | IO Interactive Confirms Layoffs Following End of Project Fantasy Partnership [UPDATE] | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMipwFBVV95cUxPNUlaZFZFRG5ITzUxbExmSGNoMDhjY2dONko0czdtX0FjVTlndmpBLUM1amFWRGNZZ04tVW9FRERwaTRJa1UwVjVyNnRuVjRvUUNRRmZXbXNERFZrQXExRTNQZG5IcjhQSko0dVU3WGxUT09rOXozdUNha1dWMGlfVnVneUpZY0NlOXpaeEZfNXAwR2pLckRrWXlfWE1KUm9IcXp0akxJTQ?oc=5) |
| channelnews.com.au | Microsoft Faces New Backlash As More Xbox Layoffs Gut Gaming Division, Kill IO Interactive Deal | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMixAFBVV95cUxNaXFUVmF4dkpBUEZyRmxzSGRPLUl1QjFEdnQ0VTFNWkRNU0tLcUpxenlSQ3JsTTBnMlpvQl9ya0JJQlZiYlF2RV9yYkVpektieWJCR1hyVUl1MkdaZlhqY1NCRjN2OG15d2hUZUt1RnhtZ00weUxKN2hUYWxZYkhWV01yV19xdy1rSk01UnZ0aW52aHdreFdNRE11dk9TMXVyenp4azZBejZpVHljemVLY19tekZGaVRCZDlFSmFCNGpEcTRz?oc=5) |
| IGN Africa | 007 First Light, Hitman Developer IO Interactive Announces Layoffs After 'Relationship With an External Partner' on Fantasy Project Ends | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMi2AFBVV95cUxQUUZtRzNPTUt3cTNKZlNZSkhDQUFiQ2xvRUZ2cHlMQTZ4Ukh1QmNURm5LWVBXX2VwdjItY1FHU2tjaG93OWszc0NDU3dDTlllVkJqMWU2MTZoUlFyeDNIRlZCczhqSEtNbURuQ1dfWXJLYVBiMWdTcUZ2RklPX0xmWFllSzZMMFZKdWJER3VWRGtvaUk2Z3pzeGFFd3F6V1pFMEJIYzVCRzd0T1ZLajNWSnJiRHlySEY0eHBtdEM2UW8tVWpYeEZyaEZoMmwzSzVGbC02MS1DUTc?oc=5) |
| Yahoo Finance UK | Xbox Pulls Out of ‘Project Fantasy’ Video Game From IO Interactive; Hideo Kojima’s ‘OD’ Still in the Works | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMiiAFBVV95cUxQeUxBd3c3b01aWVZ4MnlYOHU3WVlwODFHTm9SbmVmd3h0andldXQyLU1DZXZlUlNiVlItcFhRYWt6OU94dndvMjFRUGNiYnRhTWxzSU5MY0xDUGNLREJJbDZsUDdTRk9CQTE5R1BnOVozM0pZRWhQeHozTWV2aWdwQ3hlaE45OVZM?oc=5) |
| Variety | Xbox Pulls Out of ‘Project Fantasy’ Video Game From IO Interactive; Hideo Kojima’s ‘OD’ Still in the Works | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMirgFBVV95cUxPRVlmbmZXNkIwY2dNYzFKbXNWZ09Eb2JsdVNVa2VtMXlSSTVZWVlPQ0MxaDA2MTdBWGdMRkhzcTR2eG9TN1RMdDEyLUZWWkVNaDNxbDlnU0hpaUNqcS1XVXY0NXE0Wi1iUUVuVmZGX0NSS3FXZm9QVDFXak1CYVlDTE1NcEJmbUVVNHZ2RHBsZjVWWXMtVE9tUnJET2c2Qnp0aWVPcEVLM2dtV2w1WGc?oc=5) |
| Game Informer | IO Interactive Faces Layoffs After Xbox Ends Partnership For Its Upcoming Online RPG Project Fantasy | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMivAFBVV95cUxNd1h3elhmbExkSVh4UHRmamdmX3hUOF9PT1ZiUFZWVnN3N0dfbHVvU3BEQzIzYXFXNWZac2Zkck02UmhQNVVYaVYyUjQ2NXd3SzgxdHZVN2lXUXZtVU1uX0JQX2VvdDRQWWFkeE1OZ210NC1SUmFJT0g3QTZNVjUxcnNTQ2xUZy1uUlMwMHpIM3FRUGtaa0ZOdTNUVDhKcV9sNzJwRzRxd3BOd3FmaXBTbHRUcFRRbXNsQlNTMg?oc=5) |
| Game Developer | IO Interactive to lay off staff after Xbox exits Project Fantasy | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMiwwFBVV95cUxOdmd5MnBxY0NxcjNoYllMa1EzOXZ5X3oxYUdDUUU5cDFZMC1fdV9BcjNycmRSRjZ0TU5WSjJPVmtaVmd4Tkd3SFZOV0IxTzJaU2V3dGYtUG82QlU5Z1lUenFLUHlEY25kUkxwaW5hcWNySGdiTV9JcUpPZHIyZm9jMGN2dFBnOGxUTmNSNFlWenZoeDVZUUdiRWJsaVc0RGNVRjNMWkdMZUhUeFo5WFprZ01Xb0ljSUQ0YlNPNXA2MFpOX0k?oc=5) |
| Pure Xbox | Xbox Issues Statement After Pulling Out Of Project Fantasy | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMinAFBVV95cUxQOWtORFAxR2tqVHFQbGtCbkE2VHVRQnlucnhjdnJxcGZRTlpMUlBzd252UjJGTlh3c0luWHpLbC1ianpkWjUxdzVIZnRXQTRCa0JxVXRWZUlpejRpV2t5NDNOVFUwWTR0anlnUHQ0cGNlM0c4VjJocUgtdHBSQTNfSlNwc2YtWWRwelk4dnJwNF9WdmU5YVZJcVBKNlQ?oc=5) |
| Kotaku | IO Interactive's Fantasy IP Loses 'External Partner' Amid Xbox Cuts | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMi0AFBVV95cUxNdzgzUnZ4UjhYV25Wb3VmdFppSkdtUnMxVVRSaDdqWE04SHB3QWxrOHI0bE9yWEw5VXNPNFhncjY1cnhPV3N4emdWOHlNVGE4SFdILVZyWGdJbU5iTkd0Rm9LcE9ObWNCMFNfeXEtei1wTlBlNVc3ZU82UFRWNnpydjBVR0h2YXh2SUZON3A0SEo5SnI1TFA4NmJDbmZpWW9SRWdfX01YVEk2TEYtSVNCQmFjQlE1ZEkzVWFibFNFTkZDVHUxRGpLNW1kaUU3WG5I?oc=5) |
| PC Gamer | Ahead of next week's expected Xbox bloodbath, IO Interactive loses funding for its online fantasy RPG | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMi1wFBVV95cUxQODBhUXYwczBleWMwcktrbGxPenVsRHhXSU1FdHVZa0IxNVl5RnFEVWtpWDhSMm5PaU04ZWZzaUcxSElYeFc3Ulp5Y01IMUZhNUMxa1dEMk80aVFKS25YSXRoNlYtOG82RjFEcnFPZExvRGFzSkFvcU1PRkYyeGFKekxaRW8waVV1eXAyVnhjaGdtUmhyQzBYcm1tS1VUckQ0SFJsck9SeXowX3dwMHVHekt1dFgtOFdOU1drVGM4cUY5WUo4UjJfODFpRnNvR3ZKSm5kNV9tMA?oc=5) |
| IGN | IO Interactive Announces Layoffs After Publisher Pulls the Plug on Fantasy Game | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMi9AFBVV95cUxQV0t3RnBUcTlGVzYzV1JOWEhick8wR3lHOU5MYzI5OHI2aHRNQ0NORUdYWEFSR3NVUl9fbzJwRURBWHY4QnhMTHEzSWVCRUNndmpOcjhZVG8tbjJodGJPOWJfVllvU1pvYUNnS2xWaDN4WjBGa0JUQzRYM1ctU3dyNXhubkVJc2dZc1E3ZVQxVURFTnljdzQtd21KQnRaXzN3OU8xZVZkWnBZZ0xiV3djX2N5RXZEeTZjOGhfR2pZT2RtZmZQVU9vZGNnbmhNY05YOEhNT3p2TFZRMUptaDQ3S3FydGVLTHpPcUI5LUo5RVNMdnpy?oc=5) |
| The Verge | 007 First Light’s developer lays off staff but claims its next franchise will continue | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMiggFBVV95cUxNZmt1ZWZuTmxEQXd6eXBNQVhsT0hUaU9wX3otdi1IdkVqOXZHbExSWHhkWVAtVUkwRkpNRU1vQkdnLVBWVk13VEE5ajl1NmdBSDJ3U1ZaZXl4T25oUWU4emN5QVJPTm9OczBHSnp4S0pDSWQzS05nVTFWbEE5dXpQSEt3?oc=5) |
| Bloomberg.com | Microsoft's Xbox Pulls Out of Project Fantasy Video Game From IO Interactive | 2026-06-30 17:49 | [Source Link](https://news.google.com/rss/articles/CBMixgFBVV95cUxPVklLWG5leDI4VExzQ3dVc0tNR2FFX0UwNzdwa003SXlOVGFaZzZrZHhXSGU0RGNUcHBnOERzeTZXM3lFaXBKc0tSWlJlSFExS3RmWGtLS1JXRXFRU0QtMmJoUW16LVdxa3kzX25wUzRFb3laOUk3aFdqSWlvU1AzbjhPclkwM1AyVGt6TWlIX29pOEEyR1F2REVnSGJKRFhpWi1wUWU4aG1FZ0tBMWUxZHZpb242d0lCOWNtZmFhank5cE9Ib1E?oc=5) |

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*Canonical Source: https://www.newsylist.com/trend/2026-06-30/microsoft-s-xbox-pulls-out-of-project-fantasy-video-game-from-io-interactive*
*Synthesized by Newsylist Open Intelligence Engine under E-E-A-T journalistic standards.*