PlayStation’s Cancellation of Kojima’s Physint Makes Sense After New Report

Earlier this week, Hideo Kojima said Kojima Productions’ upcoming Physint had been dropped by PlayStation and found a new home at Xbox. In a post on X, he explained that PlayStation canceled Physint in June, which led the studio to look for a new partner. "Please rest assured that development of PHYSINT, our genre-defining action-espionage title, is ongoing and will continue moving forward," he wrote.

On Friday, a Bloomberg report explained why PlayStation canceled Physint, which was announced at a State of Play in 2024 as an "action-espionage game" and described as a spiritual successor to Metal Gear. Several reasons drove the decision, with budget concerns and weak Death Stranding sales among the main ones.

According to Bloomberg’s sources, Physint was already heading over budget even though release is still years away, and it had missed deadlines. Another factor was that Physint would not be a permanent PlayStation exclusive, as PlayStation "was reluctant to invest hundreds of millions of dollars" in a game that would eventually appear on other platforms, like Kojima Productions’ Death Stranding titles.

Kojima Productions worked with 505 Games to publish the first Death Stranding on Windows PC, as well as Xbox Series X and mobile platforms. As Sony steps back from publishing single-player games on PC, it would earn no revenue if Kojima Productions published Physint on PC—or elsewhere—itself or with another publisher.

Death Stranding and Death Stranding 2: On the Beach did not meet PlayStation’s commercial expectations. On the Beach has sold an estimated 2.5 million copies, per Alinea Analytics, with 1.8 million on PlayStation 5 and the rest on Steam. The first game sold 5 million copies in a similar period and "reached" 19 million players over five years. (It was on Xbox Game Pass for a time and was also given away on the Epic Games Store.) Alinea Analytics estimates the combined revenue of the Death Stranding games at about $413 million against combined budgets of $250–300 million.

Sony and Kojima’s relationship goes back to Metal Gear Solid’s PlayStation release in 1998. Sony also partnered quickly with Kojima Productions after Kojima and longtime publisher Konami split. As Bloomberg notes, however, "many of the PlayStation executives who had close relationships with Kojima have left the company in recent years."

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Kojima is clearly forging new ties at Xbox; Kojima Productions had already partnered with Xbox on its upcoming horror title OD. "We’re honored that Kojima-san has chosen XBOX to work with KOJIMA PRODUCTIONS on PHYSINT. His ambition to challenge conventions reflects the kind of creativity we want to support at XBOX," new Xbox CEO Asha Sharma said.

Both Bloomberg and Alinea Analytics pointed to Sony’s live-service failures—most infamously Concord—as factors in its recent decisions. Those failures have "led PlayStation to enact stricter production milestones, according to people familiar with the business," Bloomberg said.

It is not surprising that Sony, as it tightens spending, would cancel an expensive game after the studio’s previous titles failed to deliver the sales Sony expected. Still, it is not a good look for Sony, which continues to face a PR battle over its decision to stop making physical discs by 2028.

At least Physint has found a new home at Xbox. But as Xbox is in the middle of layoffs that will cost thousands of people their jobs, it is fair to wonder how it has the budget for a Kojima game that will surely not be cheap.