Hideo Kojima has described the moment Sony told him it was pulling support from PHYSINT, and he still doesn’t have a clear reason why. The comments came in an interview with IGN published on September 20, 2026. Kojima Productions posted its own statement on X the same day, addressing weeks of reporting about why Sony walked away from the project.
What happened on the June Zoom call
Kojima said Sony Interactive Entertainment asked for a video call in mid-June while he was traveling between a Prada event in New York and Los Angeles. On that call, PlayStation Studios told him it would no longer fund PHYSINT, the stealth-action game billed as a spiritual successor to Metal Gear Solid.
Kojima called it the “final notice” from Sony. He said the company gave no explanation, though he also admitted he did not press for many details during the meeting itself. His first concern shifted to what would happen to Kojima Productions, including possible staff cuts, loan pressure, and the actors who had already completed body scans for the game. Asked whether Sony had clarified its reasoning since June, Kojima said it had not.
He described being caught off guard by the decision. “Nothing could’ve prepared me for their decision to step away from the project,” he told IGN. Even so, he said he holds no bad feelings toward Sony and does not see this as a “divorce” between the two companies.
Why Sony reportedly pulled the plug
Kojima’s interview was recorded before Bloomberg reporter Jason Schreier published his own account of the split on September 11. According to Schreier’s sources, PHYSINT had missed internal deadlines and was on pace to run well over budget, even though release was still years away.
Commercial performance was also a factor. Death Stranding and Death Stranding 2 reportedly fell short of PlayStation’s revenue targets. Sony was also said to be reluctant to spend hundreds of millions more on a game that, like the Death Stranding titles, would not stay permanently exclusive to PlayStation hardware. Schreier noted that the exact size of the budget overrun is unclear, and that other factors may have played a role too, as Shacknews reported once the story broke.
Kojima Productions responds to the reports
The same day the IGN interview went live, Kojima Productions posted a statement on X addressing the coverage directly. The studio said it usually avoids commenting on speculation, but that ongoing reports about its relationship with PlayStation, Death Stranding’s sales, and PHYSINT’s budget had started affecting the studio, its fans, and its creative partners.
The statement added that the studio remains healthy and profitable, that PHYSINT is still moving forward under Xbox, and that its relationship with PlayStation remains strong. According to the Washington Post’s coverage of the interview, studio president Shinji Hirano was struck by how quickly Kojima went back to work once the June call ended.
Sudden exits by a publisher or partner are not new to gaming. We covered a similar shake-up when FaZe Clan’s roster and creator exodus reshaped that organization almost overnight.
How PHYSINT ended up with Xbox
After the June call, Kojima Productions spent close to three months looking for a new partner. Instead of pitching PHYSINT as a single game, Kojima reworked it into a wider multimedia idea covering film, TV, anime, comics, and music alongside the game itself. He said the response to that pitch was positive across the board.
Xbox, led by CEO Asha Sharma, agreed to publish and help fund PHYSINT. The deal builds on Kojima Productions’ existing work with Xbox on OD, its horror project with filmmaker Jordan Peele, and reportedly includes film and TV rights tied to both games. Unlike Sony’s recent pullback from day-one PC releases, Xbox plans to bring PHYSINT to both Xbox and PC.
Whether PHYSINT reaches PS5 at all is still unclear. Kojima said that decision now rests with Xbox rather than with him. Publisher changes like this one keep reshaping the wider industry, in the same way Global Esports’ reported deal with Revenant XSpark shifted the ownership picture in Indian esports earlier this year. Microsoft has also been expanding its footprint elsewhere in gaming, including a recently reported patent filing around pausing games for ads, as it adds projects like PHYSINT to its lineup.
For now, PHYSINT remains in development at Kojima Productions, with Xbox as publisher and Sony no longer attached to the project.
