PlayStation Ditched Hideo Kojima’s ‘Physint’ on Budget Concerns, Missed Deadlines

(Bloomberg) -- Sony Group Corp.'s PlayStation pulled out of an upcoming game by the well-known designer Hideo Kojima because of concerns over budget, potential profitability and exclusivity, according to people familiar with the project.

One major factor behind the decision was the commercial performance of Kojima's previous two games, Death Stranding and its sequel, which didn't meet PlayStation's revenue expectations, said the people, who asked not to be identified discussing information that's not public.

But the new project has also missed deadlines and was on track to be well over budget despite being years away from release, the people said. In addition, PlayStation was reluctant to invest hundreds of millions of dollars in another game that wouldn't remain permanently exclusive to the company's own hardware. Both Death Stranding games were "timed" PlayStation exclusives that were later released on other platforms. Kojima's closely held studio, Kojima Productions, retained ownership of the franchises.

The new game, Physint, hasn't yet been shown publicly but excited fans when it was announced two years ago with its promise of returning to the "espionage action" genre Kojima pioneered with Metal Gear Solid, the series that propelled him to industry stardom. Kojima surprised fans this week when he announced he would be publishing Physint with PlayStation's biggest rival, Microsoft Corp.'s Xbox.

On Wednesday night, Kojima wrote on social media that over the summer his company had "unexpectedly received notice" that PlayStation was pulling out of funding the game. "Physint is an important project both to me personally and to Kojima Productions," he wrote. "Determined to keep the project alive, we have spent the last three months searching tirelessly for a new partner."

PlayStation also addressed the split on social media, saying it had made the "difficult decision to step away." A representative for PlayStation declined to comment further. A representative for Kojima Productions did not respond to a request for comment. Microsoft said it was "honored" that Kojima chose Xbox and that the two teams plan to collaborate beyond games on films and television, too.