A new report has revealed why Sony canceled Hideo Kojima’s upcoming game, PHYSINT. According to Bloomberg, PlayStation was concerned about the commercial performance of the Death Stranding series, rising development costs, and the project eventually releasing on competing platforms.Why Did Sony Cancel Hideo Kojima’s PHYSINT?Screenshot: PlayStation, Kojima ProductionsSony recently shocked players when it announced that it had stepped away from its collaboration with Hideo Kojima on PHYSINT. The Metal Gear Solid creator later claimed that PlayStation had unexpectedly informed Kojima Productions that it intended to cancel the project.Now, a new report from Bloomberg has revealed why Sony made the surprising decision. According to anonymous sources that spoke to the outlet, Sony canceled Hideo Kojima’s PHYSINT over its budget, and Kojima Production’s allegedly missing deadlines.An update from PlayStation Studios: After careful consideration, we have made the difficult decision to step away from collaborating with KOJIMA PRODUCTIONS on its project PHYSINT. We continue to have great admiration for Hideo Kojima's vision for the game.Our relationship…— PlayStation (@PlayStation) September 10, 2026However, the inside source also claims that PlayStation had additional concerns about the tactical espionage project, that resulted in them ending the collaboration with the legendary game auteur.Death Stranding Reportedly Failed to Meet PlayStation’s Revenue ExpectationsScreenshot: PlayStationOne of Sony’s biggest concerns according to the Bloomberg report, is the commercial performance of Kojima Productions’ previous two games: Death Stranding and its critically acclaimed sequel Death Stranding 2: On the Beach. According to Bloomberg’s sources, neither game met PlayStation’s revenue expectations. While both titles eventually launched on additional platforms, its claimed that Sony wasn’t satisfied with the financial return it received after investing in the projects.PHYSINT Was Over Budget and Behind ScheduleBloomberg’s sources also claim that PHYSINT had already missed development deadlines and was on track to go significantly over budget. “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.”This was allegedly a major issue for PlayStation executives, because the espionage game was still several years away from its potential release date. Continuing development could have required Sony to invest hundreds of millions of dollars into the project that might not release until 2030.Sony Had Concerns About PHYSINT’s PlayStation ExclusivityScreenshot: Kojima ProductionsFinally, Bloomberg reported that PlayStation was also hesitant to make such a significant investment in another Kojima Productions game that would not remain permanently exclusive to its hardware.Both Death Stranding games initially launched as timed PlayStation console exclusives before eventually being released on other platforms. Kojima Productions also retained ownership of the franchise, meaning Sony did not have permanent control over the intellectual property despite helping fund and publish the games.Apparently this arrangement contributed to Sony’s decision to walk away from PHYSINT. It is important to clarify that Sony has not publicly made a statement about these claims. Bloomberg’s report cites anonymous sources at PlayStation.The post Sony Responds to Hideo Kojima and Reveals Why It Reportedly Canceled His Game appeared first on VICE.