Hideo Kojima Says Sony’s PHYSINT Exit Put His Studio at Risk

Hideo Kojima says Sony Interactive Entertainment’s decision to stop funding PHYSINT left him fearing that Kojima Productions could lose staff or even collapse before Xbox agreed to publish the action espionage game.

Speaking in an exclusive interview with IGN, Kojima said Sony delivered the decision during a Zoom call in June 2026. He had expected the project to be safe and said his immediate concern was how the independent studio would protect roughly 200 employees after staffing up for both PHYSINT and OD.

Kojima said Sony did not explain its decision during the call and has not contacted him since. He stressed that he holds no anger toward the company, describing the wider games business as a difficult environment and saying Kojima Productions’ relationship with PlayStation remains strong.

The designer initially limited knowledge of the decision to Kojima Productions president Shinji Hirano and talent development head Aki Saito. Three days later, team leaders were told that a new partner would be sought. Some PHYSINT developers temporarily moved to OD, but Kojima said no employees left and work on the project never fully stopped.

Kojima continued developing the concept, story, technology experiments, casting, and actor scans with a smaller core team. He also considered partners outside the games business before deciding the project needed not only financing, but also technical, marketing, and testing support.

That search led to Xbox, which was already working with Kojima Productions on OD. According to Kojima, the companies aligned on treating PHYSINT as a broader intellectual property that could eventually extend into film, television, animation, music, or merchandise.

Xbox confirmed its expanded partnership with Kojima Productions on September 9. The official announcement said Xbox would publish PHYSINT and collaborate with the studio across film and television. Kojima has not confirmed which platforms will receive the game, saying any PlayStation release would be a decision for Xbox.

The interview was conducted before a report claimed that missed deadlines, costs, the commercial performance of Death Stranding, and platform strategy contributed to Sony’s withdrawal. Game News Plus previously covered those reported factors.

In a statement supplied to IGN after that report, Kojima Productions called the claims unsubstantiated speculation and said the studio is profitable, PHYSINT development is moving forward with Xbox, and its relationship with PlayStation remains strong. Sony has not publicly provided a detailed explanation for ending its involvement.

PHYSINT remains early in development, with no release date or confirmed platform list. Kojima said the engine has not yet been selected, but he remains committed to finishing the game and hopes to shorten the gap between the game and a possible live-action adaptation.

Do you think Xbox is the right new home for Kojima Productions’ PHYSINT?