IO Interactive has enjoyed a ton of success lately with its hit action-game adaptation of the James Bond franchise, 007: First Light, selling 1.5 million in 24 hours and winning the hearts of critics (including our Jez Corden, who gave it a perfect review of 5/5 Stars).
However, the good times have come to a screeching halt as IO Interactive announces on X that it is no longer working with an external partner that's been helping it develop its original IP, "Project Fantasy," which Windows Central exclusively revealed as Project Dragon previously back in 2021.
Dear gaming community,For a good while, it has been all positive news from IO Interactive. We remain humbled and honored by the response to our latest outing with a young, unproven Bond. A bold new story and a take on one of the most famous characters in entertainment, which…June 30, 2026
While IO Interactive didn't state who was publishing the game, we previously reported that it was indeed Xbox back in 2021. IOI changed the codename after its previous 2021 leak from "Dragon" to "Fantasy." An Xbox spokesperson talked to Bloomberg about the cancellation.
“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.”
The game also previously leaked during Microsoft's long court battle to acquire Activision-Blizzard in 2023.
It seems that despite losing the backing of Microsoft, IOI intends to soldier on with Project Fantasy. After the success of 007: First Light, I expect they won't have trouble finding a new suitor.
Given the recent rumors that several Xbox Games Studios developers are being gutted soon, third-party titles are being frozen for Xbox Game Pass, Arkane is being shut down along with their upcoming Blade game (as reported by The Verge), and State of Decay 3 could be cancelled, this official announcement of "Project Fantasy" losing Microsoft's backing is making these rumors more likely than ever.
Only time will tell what the extent of the damage to Xbox Game Studios will be.
What do you think about this announcement? Is it confirmation that Microsoft will purge more of its Xbox Game Studios in the future? Do you think 'Project Fantasy' will come to fruition?
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