Sony Ditches Hideo Kojima's "PHYSINT" Amid Development Delays, Budget Overruns, and "Death Stranding 2" Performance

PlayStation recently announced its withdrawal from Hideo Kojima's next-generation action espionage game, "PHYSINT," with Xbox stepping in as the new publisher. According to a new report from Bloomberg, Sony's decision to part ways was driven by factors beyond the previously speculated sales performance of "Death Stranding 2: On the Beach," including significant development delays and escalating budget concerns.

Bloomberg, citing sources familiar with the matter, indicated that "PHYSINT" "missed multiple development deadlines and was already on track to be well over budget, despite being years away from release." Following the cancellation of "The Last of Us Online" and "Concord," and the underwhelming performance of high-cost projects like "Marathon," Sony is reportedly implementing stricter production milestones for its major first-party titles.

The revenue generated by the "Death Stranding" series also played a role in the decision. Market data analytics firm Alinea Analytics previously noted that sales for "Death Stranding 2" had significantly slowed, with multiple discounts failing to boost demand, and current revenue remaining below its predecessor. The report suggests that while the original "Death Stranding" was profitable for Kojima Productions, the sequel did not achieve comparable commercial success.

Bloomberg also highlighted that Sony's recent adjustments to its PC publishing strategy may have further narrowed the potential market for "PHYSINT." Additionally, several Sony executives who had long-standing relationships with Hideo Kojima, dating back to the PS1 era, have since departed the company, weakening the foundation of their decades-long partnership.

Regarding Xbox's swift acquisition of the project, the report states that new Xbox head Asha Sharma views "PHYSINT" as a worthwhile investment. Xbox plans to release a PC version of the game and intends to leverage it to expand Xbox's reach into the film and television sectors.

Rhys Elliot, an analyst at Alinea Analytics, commented, "This doesn't look great for PlayStation among core gamers, especially right now. From a strictly financial perspective, though, I can understand Sony's position."

via: Bloomberg