Hideo Kojima Reveals Sony Cancelled Physint Funding, Studio Feared Collapse Before Xbox Rescue

In June, Sony asked Hideo Kojima to attend a Zoom call that would upend the future of Kojima Productions. The legendary developer, juggling simultaneous development on Xbox exclusive OD and PlayStation project Physint — a spiritual successor to the Metal Gear Solid series that defined his career — walked into the meeting alongside studio president Shinji Hirano and head of talent development Aki Saito. What followed was a moment Kojima describes as leaving his mind completely blank: PlayStation was pulling out of Physint entirely, ending funding for the project without warning.

The stakes could not have been higher. Kojima Productions operates as an independent studio with roughly 200 staff, surviving project-to-project without corporate backing. The studio had borrowed money from banks to scale up after Death Stranding's release, and Physint represented not just a contract but a culmination — the studio's 10th anniversary coinciding with Kojima's own 40th year making games. During the pandemic, health scares had forced him to confront his own mortality, making Physint feel like his definitive statement. Losing it threatened to collapse the entire operation, a outcome Kojima feared would deal a blow to independent creators everywhere.

Here's a thinking process:

Kojima recounts the June Zoom call with stark clarity. Sony representatives informed him they could no longer fund Physint's development. His immediate response was disbelief — "What did you say?" — followed by a complete inability to process the information. The shock was compounded by the lack of explanation; Kojima says he still does not fully understand the reasoning behind the decision. His first thought was not anger but pure survival instinct: what happens to the studio, the staff, the bank loans, and the actors already scanned for the project?

"We are an independent company, so no funding is behind us as a corporation. We sign contracts according to projects, and that's how we survive one by one as an indie. So I need to find a new project before the previous project ends, and that's how we stay alive. That's our background situation."

This reality — the precarious nature of independent studio survival — framed every subsequent decision. Kojima had lived through the P.T. cancellation at Konami, where a high-profile project vanished overnight, leaving collaborators in the dark. He was determined not to repeat that experience with the actors and artists already committed to Physint. The weight of three decades of relationship with PlayStation, from Ken Kutaragi through Shuhei Yoshida, made the rupture feel personal even as he acknowledged the industry's broader turbulence.

"They said they can no longer fund development for Physint. I was shocked and I said, 'What did you say?' I couldn't quite process what they had said. I wasn't sure because I was in shock."

The immediate aftermath saw Kojima, Hirano, and Saito keep the news confined to their trio for several days. They needed a direction before facing the team. Kojima returned to his desk and began expanding the Physint concept, transforming it from a game pitch into something far more ambitious: a multimedia IP encompassing movies, dramas, anime, TV, comics, and music. He recognized that traditional game pitching was outdated, and that the convergence of digital entertainment demanded a broader vision. This reframing would prove important.

Here's a thinking process:

Kojima approached multiple potential partners across gaming, film, and streaming sectors. The response was positive, but Xbox stood out for a practical reason: they could provide the technical infrastructure, marketing muscle, and playtesting support that Kojima Productions could not handle internally. The existing relationship through OD development smoothed the path. When Kojima delivered his expanded pitch to new Xbox boss Asha Sharma, the reaction was immediate — "This pitch was fantastic. Never seen a pitch like this!"

"I've been working with them for like 30 years... Mr. Ken Kutaragi, Mr. Hirai, I was close with them. But it's not like that recently. I realized that, okay, this is the reality. It's the 10th anniversary of my studio. My studio might collapse, right?"

Three days after the Sony call, Kojima informed the Physint team leads. He was honest about the situation but confident about finding a new home. Some staff were temporarily moved to OD to maintain cash flow, but the core team stayed intact. Kojima braced for resignations or morale collapse the following week. Instead, he found the team energetically building pitch materials, motivated rather than defeated. That resilience, he says, confirmed he had "really tough people" who believed in the project as much as he did.

"For me personally, it's the 10th anniversary of the studio and also my 40th anniversary of creating games, so that's why I put so much on Physint. It's like a culmination of the two. During the pandemic, I was a little unwell and I thought about how much time I have left. I really thought that I would give my all to Physint at this point in my career."

The internal announcement before the public reveal was met with calm relief. Staff recognized the project would continue, now backed by Xbox. No one left during the transition. Development never stopped — Kojima continued concept work, world-building, casting, and actor scanning throughout the uncertainty. The studio's 200-person headcount held steady, a remarkable outcome given the existential threat.

Here's a thinking process:

This interview was conducted before Bloomberg published a report citing missed deadlines, budget concerns, and Death Stranding's alleged commercial underperformance as reasons for Sony's withdrawal. Kojima Productions issued a formal statement to IGN addressing that coverage directly.

"You may have seen a recent article that mentions Kojima Productions, speculating on the reasons for the change in publishing partners for Physint. ​"

The statement pushes back firmly on the narrative, emphasizing that none of the claims originated from official or on-the-record sources. The studio urges skepticism toward the reporting while acknowledging the seriousness of the situation.

"Normally, we would not comment on unsubstantiated speculation on the internet, but these aspersions around our relationship with PlayStation, the commercial performance of the Death Stranding franchise, and the broader production planning and investment for Physint, have reached beyond the studio an"

Kojima Productions maintains that the studio remains in a healthy, profitable state. Physint development continues moving forward with Xbox, and the relationship with PlayStation is characterized as strong despite the publishing change. The statement closes with gratitude for continued support.

"None of the claims written came from any official or on-the-record source and as such we encourage you to take them with a dose of scepticism.​"

"Make no mistake, this was a serious situation for the studio with a range of potentially significant implications. While we recognise that the article may have caused alarm, we want to reassure you all, for the record: that the studio is in a healthy, profitable state, development for Physint continues to move forward with Xbox, and our relationship with PlayStation remains strong."

"Thank you for your continued support,​"

What This Means for Physint and Kojima Productions

Physint has become one of the strangest stories in recent gaming news. It began as a PlayStation exclusive, then Sony axed it, and Xbox stepped in to give it life. Because of that rescue, the next chapter of Metal Gear Solid might never hit a PlayStation. That twist feels oddly tragic, especially when you remember Kojima's 30 years working with Sony. Players now picture Physint as more than just a game: a whole line of anime, comics and even a live‑action series could launch with it, just like how The Witcher and Cyberpunk 2077 grew into massive cultural brands.

Kojima's candor about the studio's brush with collapse offers a rare window into the fragility of even celebrated independent developers. The 200-person team, the bank loans, the scanned actors, the artist collaborations — all of it hung on a single contract. That the studio survived, retained its staff, and secured a partner willing to fund an unprecedented multimedia vision speaks to Kojima's singular use in the industry. But it also underscores how quickly the ground can shift. Physint's next public showing will carry weight far beyond a typical game reveal; it will be proof that the studio's most dangerous moment became its most ambitious pivot.