Report Details Why PlayStation Dropped Kojima’s PHYSINT

PlayStation withdrew from Hideo Kojima’s PHYSINT after concerns about its budget, schedule, expected returns, and long-term exclusivity, according to a new report by Bloomberg’s Jason Schreier.

The report, citing people familiar with the project who were not authorized to speak publicly, says PHYSINT had missed development deadlines and was projected to run well over budget despite remaining years away from release. Sony was also reportedly hesitant to invest hundreds of millions of dollars in a game that would not stay permanently exclusive to PlayStation hardware.

Death Stranding performance was reportedly another factor

Bloomberg’s sources said the commercial performance of Death Stranding and Death Stranding 2: On the Beach also influenced the decision because the games did not meet PlayStation’s revenue expectations. The report does not disclose Sony’s internal targets or provide a final budget for PHYSINT.

Kojima Productions owns its intellectual properties, which previously allowed the Death Stranding games to expand beyond their initial PlayStation releases. That ownership structure reportedly added to Sony’s concern about paying for a large production without securing permanent platform exclusivity.

None of these financial or scheduling details has been publicly confirmed by Sony, Kojima Productions, or Xbox. They remain claims from Bloomberg’s reporting rather than official explanations for the split.

What Sony, Kojima Productions, and Xbox have confirmed

PlayStation publicly announced on September 10 that it had decided to step away from its PHYSINT collaboration. Hideo Kojima said his studio had received notice in mid-June that PlayStation Studios intended to cancel the project, prompting a three-month search for a new partner.

Xbox then confirmed that it will publish PHYSINT as part of an expanded relationship with Kojima Productions. Game News Plus has a separate report covering Xbox’s PHYSINT publishing announcement and the companies’ broader partnership.

PHYSINT was first announced during a PlayStation State of Play presentation in January 2024 as a new action-espionage intellectual property. Kojima Productions later revealed concept art and named Charlee Fraser, Ma Dong-seok, and Minami Hamabe among its cast.

The game remains in development, but no release date, release window, confirmed platforms, or price has been announced. The move to Xbox as publisher should not be treated as proof of platform exclusivity until the companies provide specific launch details.