Bloomberg Reports PlayStation Dropped Physint Over Budget and Death Stranding Sales

Neither PlayStation nor Kojima Productions said much when the split became public this week, just a couple of vague statements about “stepping away” and “searching for a new partner.” Bloomberg’s Jason Schreier has now filled in the actual reasoning, and it comes down to money, missed deadlines, and KojiPro no longer having the personal connections it once did.

PHYSINT Was Well Over Budget And Nowhere Near Completion

According to people familiar with the project, PlayStation’s decision traces back to how Death Stranding and Death Stranding 2 performed commercially. Neither hit Sony’s revenue targets, and that colored how the company viewed Physint’s growing budget.

The game had also missed development deadlines and was tracking well over budget despite still being years from release. Sony reportedly balked at sinking hundreds of millions more into a project it wouldn’t even keep exclusive long-term, since Kojima Productions owns the IP outright and both Death Stranding games eventually landed on other platforms as timed exclusives.

Kojima’s ties to PlayStation go back to the original Metal Gear Solid on PS1, and when he was fired from Konami after the release of Metal Gear Solid V, it was PlayStation that swooped in to fund Death Stranding. But per Bloomberg’s sourcing, most of the executives who had that personal rapport with Kojima are gone from the company now.

Related: Xbox Swoops In To Save Kojima’s PHYSINT After PlayStation Quietly Canceled It

Xbox Will Publish PHYSINT On Both Xbox Consoles & PC

Sony has stopped bringing its single-player exclusives to PC, meaning it would earn nothing from a future PC release of Physint regardless of who published it. Xbox, on the other hand, ships everything on PC as a matter of course and plans to do the same here.

The deal also folds in film and TV rights for Physint and Kojima’s other in-development project, OD, which lines up with CEO Asha Sharma’s push to expand Xbox properties into other media. An Xbox spokesperson kept its own comment short:

Betting on Kojima-san is an easy call. We believe in his team’s ability to build AAA games with groundbreaking, new IP.”

Whether that bet pays off is a separate question. Sony’s had a rough year of its own, between AI-driven hardware shortages, the decision to drop physical PlayStation games, and a string of canceled live-service projects following Concord’s collapse. Losing Kojima publicly doesn’t help that narrative, even if the financial logic behind it holds up.