Hideo Kojima's action-espionage game Physint, once positioned as PlayStation's spiritual successor to Metal Gear, has switched publishers from Sony to Xbox. Kojima said he 'unexpectedly received notice from PlayStation Studios that they would cancel the PHYSINT project,' while both companies initially described the split as amicable. A Bloomberg report, cited by IGN, GamesRadar+, Rock Paper Shotgun and Kotaku, now details the reasoning behind Sony's decision.

According to the report, Physint had missed production deadlines and was on track to go well over budget while still needing years of additional work. This came as Sony tightened milestone check-ins across its studios following a string of failed or canceled live-service projects, including Concord, that left gaps in the PS5 lineup. The report also notes that a permanent PlayStation exclusivity deal was not part of the arrangement, making a timed-exclusive deal less appealing at a time when Sony is reportedly pulling back from PC releases to focus on console exclusivity.

Financial concerns were reportedly compounded by the performance of Kojima's two Death Stranding games, which missed Sony's internal targets. Analyst firm Anilea Analytics estimates the original Death Stranding sold about 5 million copies and made roughly $243 million against a $100 million budget, while Death Stranding 2 sold around 2.5 million copies and made about $129 million against a budget estimated between $150-200 million. Combined, the franchise generated about $413 million, which Anilea describes as breaking even 'but not by much,' with an estimated return on investment of 18% to 38%.

Bloomberg also notes that several PlayStation executives who had close relationships with Kojima, including Andrew House, who announced the original PlayStation exclusivity deal in 2015, have since left the company. Their departures may have weakened the internal relationships that once supported Kojima's projects at PlayStation.

Physint has since been picked up by Xbox, whose CEO Asha Sharma called it 'a big moment for Xbox.' A Microsoft spokesperson told Bloomberg that 'betting on Kojima-san is an easy call.' Xbox was already backing Kojima's other project, OD, since its 2023 reveal under former Xbox chief Phil Spencer; Kojima has called the OD pitch 'crazy,' and Sharma has described the game as 'deeply moving.'

Commentary from GamesRadar+ frames Sony's decision within a broader pattern of setbacks, noting it came within a day of mixed reviews for Marvel's Wolverine, described as the worst-reviewed Insomniac game in a decade. The piece links the Physint cancellation to years of PlayStation studios being redirected toward live-service projects that were later scrapped, including efforts at Bungie, Bend Studio, Firewalk and others, alongside reported moves by Sony to scale back PC releases and physical game support.

Correction — 2026-09-11: Replaced the promise of hard sales and budget figures with language preserving the source’s estimates and rumored budgets.