Video game creator Hideo Kojima revealed that Sony Interactive Entertainment abruptly cancelled funding for his upcoming game Physint during a mid-June Zoom call without providing a reason. The sudden decision left his independent studio vulnerable before Microsoft and Xbox stepped in to publish the stealth action project.
The June Zoom Call That Blindsided Kojima Productions
Hideo Kojima received unexpectedly received notice from PlayStation Studios that they would cancel the Physint project during a video conference in mid-June. Kojima attended the call alongside Kojima Productions president Shinji Hirano and head of talent development Aki Saito, while a Sony representative delivered the news.
According to interviews published across multiple outlets, the studio received no explanation for the sudden termination. Kojima noted that his mind went completely blank during the exchange. Hirano recalled that The biggest surprise was Hideo’s actions after that. He went back to his room and started working rather than reacting with anger or visible frustration.
“I was shocked and I said, ‘What did you say?’ I couldn’t quite process what they had said.”
Hideo Kojima, via Exputer
Financial Vulnerability and the Threat to Independence
Because Kojima Productions operates as an independent entity without a massive corporate umbrella, the loss of a primary publisher threatened the entire organization. Kojima explained that Kojima Productions has no independent corporate backing behind it, and survives by lining up outside funding one project at a time, securing each new contract before the previous one concludes.
At the time of the cancellation, the studio was managing only two active titles: Physint and the horror project OD, which is being produced in collaboration with Microsoft. With nearly 200 staff members on payroll—many brought on specifically to work on Physint—Kojima feared the studio could face collapse if alternate funding failed to materialize.
“We’re an independent studio. That means if they can’t fund us, our studio could collapse.”
Hideo Kojima, via Mashable
To avoid mass layoffs while navigating the crisis, Kojima quietly shifted a portion of the development staff over to work on OD. He withheld news of the cancellation from most of his employees for three days while searching for a resolution, keeping morale steady until a new publishing agreement was finalized.
Microsoft Steps In to Secure Physint and Expand the IP
Rather than letting the project die, Kojima pitched the stealth action game to alternative partners. He ultimately chose Microsoft and Xbox because the division offered robust technical, marketing, and financial support, building on the existing relationship established through the development of OD.
Rather than treating the title as a traditional standalone game, Kojima proposed developing ‘PHYSINT’ as a wider multimedia property involving film, television, anime, comics and music. Xbox leadership responded enthusiastically to the comprehensive pitch, agreeing to publish the game and support the broader intellectual property strategy.
Despite the abrupt nature of Sony’s departure, Kojima emphasized that he harbors no personal bitterness toward the company. He noted that he still has this relationship with Sony, pointing out that he continues to use Sony cameras and audio equipment in his daily life.
Unsubstantiated Reports and Studio Pushback
Following the public transition to Xbox, Bloomberg published a report citing unnamed sources who claimed Sony walked away due to budget overruns, missed milestones, and concerns over future profitability. Kojima Productions swiftly addressed those claims, releasing a statement urging the public to take them with a dose of scepticism and noting that the studio remains in a healthy, profitable financial state.
With development now back on track under Microsoft, the team has begun working on digital assets, including 3D model scanning for cast members such as recently announced lead actor Bill Skarsgård.
Keep reading