Xbox Pulls Out of Deal to Fund and Publish IO Interactive's Project Fantasy - News
by William D'Angelo , posted on 01 July 2026 / 2,212 Views
Xbox has decided to end a deal with IO Interactive on Project Fantasy that it was funding and set to publish, according to a report from Bloomberg's Jason Schreier.
IO Interactive plans to continue to develop the game, however, it will have to fund other funding or publish the game itself.
An Xbox spokesperson stated that Xbox is "taking a fresh look at where we invest so we’re focusing on our highest priorities."
"We're not reducing our overall investment in games," the spokesperson added. "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."
IO Interactive in its own statement on social media said "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."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can follow the author on Bluesky.
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“We're not reducing our overall investment in games," the spokesperson added. "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."
In other words: Microsoft acquired several massive studios, and it’s become too much to handle. So they’re trimming the “weeds” (i.e. studios behind smaller budget releases) and placing more hands-on-deck for the big franchises (Halo, Elder Scrolls, Forza, Gears). Not a direction I’m fond of, but it is a predictable one.
Pretty much.
I wonder what they think will fit Gamepass once their potential 1st Party Day One releases are all massive, expensive AAA games.
When you only have 2 or 3 big games to launch each year, I feel like you're purely in COD territory, where it's better to sell straight copies.
Good, moneyhat from m$ is never good
