Hideo Kojima Says Sony Cut PHYSINT Funding in Zoom Call, Leaving Him 'Shocked' and 'Surprised'

Hideo Kojima says Sony told him on a Zoom call that it would no longer fund his upcoming game 'PHYSINT', leaving the creator of 'Metal Gear Solid' suddenly facing the possibility that his independent studio might not survive. Kojima said Sony Interactive Entertainment contacted him in June to arrange the call.

Although he was aware of the wider financial difficulties affecting the video game industry, he believed his latest project was safe from the wave of cancellations and studio cutbacks. Instead, he said Sony told him it could no longer fund 'PHYSINT'.

Kojima Was 'Shocked' by Sony Decision

Kojima explained that he understood why companies across the games industry were cutting costs, with studios closing and projects being cancelled. However, he had not expected 'PHYSINT' to be affected.

'I was shocked,' Kojima recalled. 'I couldn't quite process what they had said.' He added, 'I thought PHYSINT was okay. That PHYSINT was safe. So I was surprised. But not just surprised. We didn't understand the reason.'

The decision left Kojima particularly concerned about the future of Kojima Productions, the independent studio he founded in 2015. 'We're an independent studio. That means if they can't fund us, our studio could collapse,' he said.

Kojima said his immediate concern was not anger towards Sony but what the decision could mean for his employees.

The studio has nearly 200 staff, many of whom had been hired specifically to work on 'PHYSINT'. He also said he did not want to immediately tell employees that Sony had withdrawn its support for the project, fearing the uncertainty could lead to staff leaving.

Why Did Sony Stop Funding PHYSINT?

Kojima said he did not understand why Sony decided to stop funding the game and suggested he wished the company had told him earlier in development. The decision came after several years of collaboration between Kojima and PlayStation.

'PHYSINT' was officially announced in 2024 as a PlayStation project, with Sony Interactive Entertainment originally attached to the game.

Kojima said the project had been discussed with former Sony Interactive Entertainment president and CEO Jim Ryan, who had supported the idea before retiring from the company. Recent reports have offered possible explanations for Sony's decision.

It was reported that concerns included the game's budget, missed deadlines, potential profitability and its lack of long-term exclusivity to PlayStation. Those claims have not been confirmed by Sony on the record, and Kojima Productions has disputed what it described as unsubstantiated speculation.

The studio said 'PHYSINT' remained in development and that its relationship with PlayStation was still strong. Sony has not publicly provided a detailed explanation for its decision.

Xbox Becomes PHYSINT's New Publisher

Rather than abandon 'PHYSINT', Kojima began looking for another partner. He said he initially considered pitching the project to multiple companies but decided to expand his vision beyond a conventional video game.

His proposal included the possibility of developing 'PHYSINT' as a wider multimedia property involving film, television, anime, comics and music.

Kojima eventually approached Microsoft and Xbox, which was already working with Kojima Productions on 'OD', a separate horror project. According to Kojima, Xbox responded positively to the expanded concept and agreed to publish 'PHYSINT'.

The project has therefore moved from its original PlayStation partnership to Xbox, with development continuing. Kojima Productions has since confirmed that the studio remains financially healthy and that work on 'PHYSINT' is continuing.

Kojima Still Has No Bad Feelings Towards Sony

Despite the change, Kojima said he does not regard his relationship with Sony as hostile. 'Corporations are like living things,' he said. 'I still have this relationship with Sony. I use Sony cameras, Walkman still. We're not in a dispute. We're not fighting with them.'

For now, 'PHYSINT' remains in development under its new Xbox partnership. Kojima said the story and concept are written, and the studio has begun work on 3D models and scanning its cast, including recently announced lead actor Bill Skarsgård.

The game was originally intended to mark Kojima's return to the espionage genre associated with his 'Metal Gear' legacy. Now, after an unexpected funding cut from Sony and a search for a new publisher, 'PHYSINT' is continuing under a different arrangement.