PlayStation’s Shock Cancelation of Kojima’s New Game Now Makes Perfect Sense

Earlier this week, Hideo Kojima revealed Kojima Productions’ upcoming Physint had been dropped by PlayStation and found a new home at Xbox. In a post on X, he explained PlayStation had canceled Physint in June, leading the company to search 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 report from Bloomberg shed light on why PlayStation canceled Physint, which was announced at a State of Play in 2024 as an “action-espionage game” that’s been called a spiritual successor to Metal Gear. Multiple reasons contributed to the decision, with budget concerns and weak Death Stranding sales chief among them.

According to Bloomberg’s sources, Physint was already on a path to being over-budget, even though it is still years away from being released, and it had also missed deadlines. Physint not being a permanent PlayStation exclusive was also a factor as PlayStation “was reluctant to invest hundreds of millions of dollars” in a game that would eventually land on other platforms, like Kojima Productions’ Death Stranding games.

Kojima Productions partnered with 505 Games to publish the first Death Stranding on Windows PC (as well as Xbox Series X and mobile platforms). As Sony is moving away from publishing single-player games on PC, it would not get any revenue if Kojima Productions were to publish Physint on PC (or elsewhere) itself or with a different publisher.

Death Stranding and Death Stranding 2: On the Beach failed to meet PlayStation’s commercial expectations. On the Beach has now sold an estimated 2.5 million copies, according to Alinea Analytics, with 1.8 million of those on PlayStation 5 and the rest on Steam. The first game sold 5 million copies in a similar timeframe, and “reached” 19 million players over five years. (It was available on Xbox Game Pass for a time, and also given away on the Epic Games Store.) Alinea Analytics pegs the combined revenue of the Death Stranding games at about $413 million against combined budgets of $250-300 million.

Sony and Kojima’s relationship extends back to Metal Gear Solid‘s PlayStation release in 1998. Sony also quickly partnered with Kojima Productions after Kojima and his 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.”

Kojima is clearly building new relationships 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 flops — infamously headlined by Concord — as factors in its recent decision-making. Those failures have “led PlayStation to enact stricter production milestones, according to people familiar with the business,” Bloomberg stated.

It’s not surprising that Sony, as it tightens its purse strings, would cancel an expensive game after the studio’s previous games didn’t deliver the sales Sony expected. Still, it’s not a good look for Sony, which continues to fight a PR battle over its decision to stop making physical discs come 2028.

At least Physint has found a new home with Xbox. Though, as Xbox is in the midst of layoffs that will result in thousands of people losing their jobs, one has to wonder how it has the budget for a Kojima game that surely won’t be cheap.