Hideo Kojima and KOJIMA PRODUCTIONS had been developing the new action-espionage game "Physint" in partnership with Sony Interactive Entertainment (SIE). In a stunning turn, however, PlayStation recently exited the project, with Xbox taking over as publisher.
Now, in his first interview with "IGN Japan" since the news broke, Hideo Kojima has detailed what happened when Sony informed him in June 2026 that it would stop funding the project. Kojima admitted his mind went blank and said he briefly feared cash-flow problems could force his studio to shut down.
▌Sony Pulled Funding During a Zoom Call — and Kojima Never Saw It Coming
Kojima said SIE unexpectedly invited him to a Zoom meeting in June. He attended alongside KOJIMA PRODUCTIONS president Shinji Hirano and head of talent development Aki Saito, only for Sony to announce during the call that it would no longer fund development of "Physint."
"I was shocked, and I said, 'What did you say?' I couldn't quite process what they had said because I was in such shock," Kojima recalled. While he understood that the gaming industry had been hit by studio closures and canceled projects in recent years, he had always believed "Physint" was "safe" and never expected Sony to make such a decision.
Rather than anger, his immediate concern was the future of the company. "My first thought was, 'What am I going to do with my studio?'" he said. 
As an independent developer, KOJIMA PRODUCTIONS does not have a major parent company providing a steady source of funding. Instead, the studio operates through contracts secured for individual game projects. At the time, Kojima said the company had only two major projects, "OD" and "Physint," and had expanded its workforce to roughly 200 employees based on that workload.
"If we lost one contract, I started thinking, would I have to let go of everyone working on 'Physint'? Or could the studio collapse because we ran out of cash flow?" Kojima said. He added that the company had borrowed money from banks to support its operations and expansion, meaning the sudden loss of a major project could have carried serious consequences if lenders learned about it.
By that point, "Physint" had already begun casting and scanning actors, while talks were underway with several artists. Kojima therefore refused to give up on the game so easily.
"I couldn't tell them the game had been canceled. I didn't want to go through what happened with 'P.T.' again," he said.
▌Kojima Kept the News From Staff, Continued Writing and Promised to Find a New Partner
After Sony ended its funding, Kojima did not immediately tell the entire staff. He kept the news between himself, Shinji Hirano and Aki Saito while they explored potential alternatives. Remarkably, Kojima said the first thing he did after the meeting was return to his desk and continue writing the concept for "Physint."
"It was such a major development that I ended up adding even more material to the concept for 'Physint,'" he said. Three days later, Kojima briefed the project's team leads and reassured employees: "I'll find a new partner, so don't worry." 
To keep the studio running, some members of the "Physint" team were temporarily reassigned to "OD," but no employees left over the situation. Kojima had feared morale would collapse, yet when he walked into the office the following week, he found the staff enthusiastically preparing materials for a new pitch.
"I thought, wow, my people are really strong," he recalled.
Kojima then began considering a new business model. He believed approaching companies with a game proposal and simply asking them to fund it was too old-fashioned. Instead, he decided to pitch "Physint" as a multimedia IP spanning movies, television, anime, comics and music.
Ultimately, Hideo Kojima turned to Xbox, which was already partnering with the studio on "OD." 
"I formally pitched 'Physint' to them, and their first reaction was, 'This proposal is incredible. We've never seen anything like it!'" Kojima said. Xbox was willing not only to provide funding, but also to support the project with technology, marketing and testing. More importantly, both sides shared the same vision for expanding the IP.
"They weren't thinking only about funding a game. They were thinking about movies, animation and the entire IP. We would all create a new IP together on a much larger scale."
Kojima also revealed that experiments involving the world, script, gameplay systems, AI, models, visuals and actor scanning remain underway. Development never truly stopped, though the team has yet to settle on a game engine.
▌Sony Still Hasn't Explained Its Decision, but Kojima Insists There Is No Feud
Asked why Sony abruptly stopped investing in the project, Kojima said he has yet to receive any further explanation.
"No, not at all. They haven't contacted me since," he said. Still, Kojima stressed that he had not fought with Sony and that there was no dispute between the two sides. After working together for nearly 30 years, however, he wished the situation had been handled differently.
"If this was going to be the outcome, I wish I had known a little earlier instead of receiving the final notice during that meeting in June," he said.
Bloomberg previously reported that Sony exited "Physint" over concerns involving its development schedule, budget, platform strategy and the commercial performance of "DEATH STRANDING." KOJIMA PRODUCTIONS subsequently issued an official statement emphasizing that those claims did not come from any official or on-the-record source. 
The studio also said it remains "healthy and profitable," that development of "Physint" continues with Xbox and that its relationship with PlayStation remains strong.
As for whether "Physint," once planned as a PlayStation title, could still eventually launch on PS5, Kojima offered no answer and said any platform decisions would be up to Xbox.
"I'm not sure right now, so I really can't say," he said.
via： IGN Japan