Hideo Kojima revealed that Sony ended its publishing involvement with the action-espionage game PHYSINT during a sudden Zoom call in June without offering an explanation. Following three months of searching for a new partner, Kojima Productions reached an agreement with Xbox to continue development on the title.
The June Zoom Call That Ended the Sony Partnership
The partnership behind one of gaming’s upcoming projects dissolved abruptly over a video conference. Hideo Kojima recounted that Sony Interactive Entertainment requested a Zoom call while he was traveling between a Prada event in New York and Los Angeles in June. PlayStation Studios informed him during that meeting that the company would no longer fund the action-espionage game PHYSINT.
The developer admitted the decision caught him entirely off guard. Although industry layoffs and cancellations have become common, he assumed the project was secure.
They said they could no longer fund the development of PHYSINT. I was shocked and couldn’t process what I’d heard. Of course, I know there’s a lot of news in the game industry right now about studios closing and projects being canceled, and I understand the overall situation in the industry. But I thought PHYSINT was fine. That PHYSINT was safe. So I was surprised. But not just surprised — we didn’t understand the reason for it.
Hideo Kojima, via egw.news
Kojima noted that Sony gave no explicit rationale for pulling out of the project during what became their final notice, and he did not press for details during the call. When later asked if PlayStation ever clarified its reasoning, Kojima replied that they had not contacted him ever since.
Fears for the Studio and the Origins with Jim Ryan
The sudden severance of ties immediately triggered deep operational anxieties within the development house. Kojima delayed telling his staff while evaluating the potential fallout for Kojima Productions.
The founder weighed scenarios ranging from staff downsizing and voluntary departures to bank loan pressures tied to expansion following the release of Death Stranding. He also worried about actors who had already completed body scans for the game.
That sudden vulnerability contrasted sharply with how the project first began. Kojima had wanted to return to the action-espionage genre after hearing repeated fan requests for another game similar to Metal Gear. He pitched the concept to former Sony Interactive Entertainment president and CEO Jim Ryan shortly before Ryan’s retirement. Ryan embraced the idea enthusiastically, securing a mutual agreement between both organizations before corporate leadership structures shifted.
Kojima Productions Denies Industry Speculation and Profitability Concerns
Following the split, external reports surfaced pointing to friction over budgets, missed milestones, and the commercial performance of the Death Stranding franchise as drivers for Sony’s exit. On September 20, Kojima Productions issued an official statement on X pushing back against those unverified claims.
Normally, we would not comment on unsubstantiated speculation on the internet, but these aspersions around our relationship with PlayStation, the commercial performance of the DEATH STRANDING franchise, and the broader production planning and investment for PHYSINT, have reached beyond the studio and have touched our fans, our creative partners, and colleagues we have worked alongside with for three decades.
Kojima Productions (Eng), via dexerto.com
The studio emphasized that none of the claims originated from official or on-the-record sources. Despite losing its primary publisher, the studio is in a healthy, profitable state, according to the official release.
Moving Forward with Xbox and Maintaining Ties with PlayStation
Rather than ending up in developmental limbo, the studio spent three months securing a replacement partner. Xbox stepped in to take over publishing duties, partnering with the developer on PHYSINT alongside their ongoing work on the horror title OD.
Despite the abrupt cancellation of the PlayStation partnership, Kojima maintained that no hostile feud exists between his team and Sony. Pointing to a three-decade professional history, he noted a complete lack of animosity.
We’re not in dispute. We’re not fighting with them.
Hideo Kojima, via dexerto.com
Kojima even underscored his personal affinity for Sony hardware, noting that he still listens to music on a Walkman and uses Sony cameras.
Current Production Status and What to Watch Next
With a new publishing agreement anchored by Xbox, development on PHYSINT is actively moving forward with casting underway. The project recently secured a confirmed lead actor in Bill Skarsgård.
Observers and fans should watch for further casting announcements and technical updates regarding the title’s production schedule under its new Xbox partnership.