Bloomberg has reported that Xbox has ended its funding agreement for Project Fantasy, the upcoming original RPG from IO Interactive.
According to the report, Microsoft has been reassessing its investment strategy following recent restructuring efforts, choosing to focus resources on what it considers its highest-priority projects.
Addressing the company’s broader approach to game development, Xbox said:
“We’re not reducing our overall investment in games. We expect to invest about the same in content as we did last year. What’s changing is where we’re investing and the kinds of projects we’re backing.”
Following the end of the partnership, IO Interactive confirmed that its publishing agreement with an external partner for Project Fantasy has concluded.
“A relationship with an external partner on our own IP, Project Fantasy, has come to an end.”
The studio added that it will need to adjust to the change, warning of immediate consequences for its workforce.
“We will have to adapt to this new reality and its short-term consequences, including staffing decisions.”
Project Fantasy was first announced in 2022 as a new online fantasy RPG and marks IO Interactive’s first original IP since the Hitman series. Despite losing Xbox’s backing, the studio has not announced that development has been cancelled.