Updated

Updated · Kotaku · Jun 30

Microsoft Confirms Xbox Backed Project Fantasy, Pulls Out as IO Interactive Cuts Staff

Updated

Updated · Kotaku · Jun 30

Microsoft Confirms Xbox Backed Project Fantasy, Pulls Out as IO Interactive Cuts Staff

Q: Who is the secret partner now funding Project Fantasy after Xbox abruptly pulled its support?

It is not publicly known. IO Interactive CEO Hakan Abrak has said Project Fantasy is “still financed” and in a “very healthy place,” but he has not identified the new backer. The reporting indicates Microsoft was the external publishing partner that withdrew as part of its broader Xbox reset. After that exit, IO Interactive confirmed layoffs but also said it remains “100% committed” to Project Fantasy and that the game will still be released. What can be said with confidence is that the project appears to have secured replacement financing or continued internal support. Abrak’s comments strongly suggest a new funding arrangement is in place, but there is no verified public evidence naming the partner. Some background material notes IO Interactive is listed as the project’s publisher, which may indicate self-publishing or at least a larger internal role, but that does not confirm who is providing the financing. So the direct answer is that the “secret partner” has not been disclosed. Any claim naming a company at this point would be speculation rather than established fact.

3 articles · Updated · Kotaku · Jun 30

Microsoft said Xbox had been backing IO Interactive's Project Fantasy and is now taking “a fresh look” at investments, confirming its role after the partnership ended.
That withdrawal triggered layoffs at IO Interactive, which said the split with an external partner forced staffing cuts even as it remains “100% committed” to the new fantasy IP.
Xbox said it is not cutting overall games spending and expects content investment to be about the same as last year, but will redirect money toward higher-priority projects.
The move lands as Microsoft prepares steep gaming-division cuts, with some first-party studios reportedly facing closure or spinoffs after Project Fantasy had already scaled back online ambitions in 2025.