The rumored Xbox cuts are underway, with at least five first-party studios potentially closing: Double Fine, Compulsion Games, Ninja Theory, Undead Labs, and Arkane Lyon. But Xbox CEO Asha Sharma is also trimming Xbox's funding for third-party studios: today, they officially pulled out of funding Project Fantasy, IO Interactive's fantasy online action RPG announced in early 2023 and still largely under wraps, given that the Danish developer was busy making 007 First Light.
IO Interactive revealed the news in a tweet, confirming that Xbox's decision inevitably forces the studio to lay off staff. However, they also made it clear that it has not given up on the project at all:
A relationship with an external partner on our own IP, Project Fantasy, has come to an end. This means we have to adapt to this new reality and its short-term consequences, including staffing decisions, which is what is happening as we write this update, and we are fully committed to supporting those affected through this challenging transition. Project Fantasy is a game, a world, and an IP that we absolutely love and remain 100% committed to, now and in the future. This wonderful universe will see the light of day.
Whether that means shelving the project until better times, finding another publisher, or a combination of the two, remains to be seen. As for Xbox, a spokesperson commented to Bloomberg that funding in games isn't diminishing, just shifting from certain projects to others:
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.
This aligns with reports that Sharma might be willing to sacrifice other teams and projects to invest more in important franchises like Elder Scrolls and Fallout.
Fortunately for Hideo Kojima fans, it does not seem like his ambitious horror game OD, which will be published by Xbox Game Studios, is on the chopping block. That's what a source told IGN, anyway. Recently, Kojima commented that OD aims to push the limits of horror beyond those of current games.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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