A new report has revealed why Sony reportedly canceled Hideo Kojima’s upcoming game, PHYSINT. According to Bloomberg, PlayStation was concerned about the commercial performance of the Death Stranding series, rising development costs, and the project eventually releasing on competing platforms.
Why Did Sony Cancel Hideo Kojima’s PHYSINT?
Sony recently shocked players when it announced that it had stepped away from its collaboration with Hideo Kojima on PHYSINT. The Metal Gear Solid creator later claimed that PlayStation had unexpectedly informed Kojima Productions that it intended to cancel the project.
Now, a new report from Bloomberg has revealed Sony’s alleged reasoning behind the decision. According to anonymous sources familiar with the situation, several major factors reportedly contributed to PlayStation ending its partnership with Kojima Productions.
An update from PlayStation Studios: After careful consideration, we have made the difficult decision to step away from collaborating with KOJIMA PRODUCTIONS on its project PHYSINT. We continue to have great admiration for Hideo Kojima’s vision for the game.
Our relationship…— PlayStation (@PlayStation) September 10, 2026
According to Bloomberg, Sony canceled Hideo Kojima’s PHYSINT over its budget, and Kojima Production’s missing deadlines. However, the inside source also claims that PlayStation had additional concerns about the project, that resulted him them ending the collaboration.
Death Stranding Reportedly Failed to Meet PlayStation’s Revenue Expectations
One of Sony’s biggest concerns was reportedly the commercial performance of Kojima Productions’ previous two games, Death Stranding and its sequel.
According to Bloomberg’s sources, neither game met PlayStation’s revenue expectations. While both titles eventually launched on additional platforms, Sony reportedly wasn’t satisfied with the financial return it received after investing in the projects.
PHYSINT Was Reportedly Over Budget and Behind Schedule
Sales were reportedly not Sony’s only concern. Bloomberg’s sources claim that PHYSINT had already missed development deadlines and was on track to go significantly over budget.
This was allegedly a major issue for PlayStation because the espionage game was still several years away from being released. Continuing development could have required Sony to invest hundreds of millions of dollars into the project.
Sony Reportedly Had Concerns About PHYSINT’s PlayStation Exclusivity
PlayStation was also reportedly hesitant to make such a significant investment in another Kojima Productions game that would not remain permanently exclusive to its hardware.
Both Death Stranding games initially launched as timed PlayStation console exclusives before eventually being released on other platforms. Kojima Productions also retained ownership of the franchise, meaning Sony did not have permanent control over the intellectual property despite helping fund and publish the games.
According to the report, this arrangement contributed to Sony’s decision to walk away from PHYSINT. It is important to clarify that Sony has not publicly confirmed these claims. Bloomberg’s report cites anonymous sources reportedly at PlayStation, so technically Sony’s complete reasoning remains unofficial.
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