Sony reportedly ditched Hideo Kojima's Physint following missed deadlines, bloated budgets, and Death Stranding 1&2 missing sales expectations

Following Sony's announcement earlier this week that it had "stepped away" from Kojima Production's previously PlayStation-exclusive "action espionage" Physint, a new report has claimed Sony's decision was the result of concerns over "budget, potential profitability and exclusivity."

Speaking to Bloomberg, sources familiar with the project said a major factor behind the decision was the commercial performance of Hidea Kojima's prior two games, Death Stranding and Death Stranding 2. While both were critically acclaimed, they reportedly did not pull in the revenue Sony expected.

It's also claimed Physint was over budget, and had missed deadlines despite "being years away from release." The game was also set to be published on other platforms aside from the PlayStation, and Sony was "reluctant" to invest hundreds of millions of dollars into a project that wouldn't be exclusive to its console ecosystem.

This follows reports earlier this year that Sony has abandoned its previous multi-format approach, and would no longer release its single-player PlayStation games on PC, instead keeping them PS5-exclusive. Physint, as an IP owned by Kojima Productions, would have run against this strategy. Bloomberg also notes that while Hideo Kojima and Sony have had a tight business relationship for decades, the PlayStation executives close to Kojima have left in recent years.

Sony has also faced significant software-related troubles in recent years, including 2024's Concord flop and Marathon's continued struggles, which has led the company to implement stricter production milestones, according to Bloomberg. This, in turn, has resulted in several game cancellations.

Additionally, Bloomberg notes the hardware cost crisis caused by the generative AI industry has made consoles more expensive, both for consumers to buy and for Sony to produce. As a result, the company is now focused on maximising revenue from its existing userbase, rather than pushing to grow its audience.

Enter Xbox, which swooped in to pick up Physint following Sony's departure from the project. Microsoft's gaming arm has struggled with its own share of controversies in recent times, including sweeping layoffs and the ongoing impact of BTS boycotts.

According to Bloomberg, Physint was seen as a good investment by Xbox due to its presence on PC, and its film and television rights, which aligns with prior statements from Xbox CEO Asha Sharma on pushing the company's franchises into different mediums.

An Xbox spokesperson even provided Bloomberg a statement when asked, saying, "Betting on Kojima-san is an easy call. We believe in his team’s ability to build AAA games with groundbreaking, new IP and we believe in OD, Physint, and our growing partnership."