In mid-September, it became known that PlayStation decided to stop funding the development of Hideo Kojima's spy action game Physint. Soon after, various 'insider' reports began to circulate online, claiming that Sony was not impressed with Death Stranding's sales, and that the developers were behind schedule and over budget.
Kojima Productions issued a refutation:
We do not normally comment on unsubstantiated speculation on the Internet, but defamatory statements regarding our relationship with PlayStation, the commercial performance of the Death Stranding franchise, and further plans for the production and investment in Physint, have gone beyond the studio and affected our fans, creative partners, and colleagues with whom we have worked for 30 years. None of the statements made came from official or confirmed sources, so we urge you to treat them with a degree of skepticism.
Hideo Kojima himself also started giving interviews. During a conversation with IGN, he revealed that PlayStation canceled funding for Physint with one phone call. This decision by the company came as a surprise to him; Kojima 'felt dizzy':
In June, Sony representatives said they wanted to have a Zoom call with me. At that moment, I was very busy: I had just traveled to New York for a Prada event, and immediately after that, I went to Los Angeles. But in the end, I returned, and we had that call. They said they could no longer fund the development of Physint. I was shocked and asked, 'What did you say?' I couldn't immediately grasp what I heard — partly because I was in a state of shock. I understand that there is a lot of news in the gaming industry now about studio closures and project cancellations, and I generally understand the state of the industry. But I thought Physint was safe.
Kojima does not understand the reason for this decision but holds no grudge against Sony, as he understands that 'the gaming industry is going through tough times right now':
I felt neither anger nor sadness. My first thought was, 'What will happen to my studio now?' After all, we sign contracts for specific projects. Of course, we still had OD, but the studio only had two projects — OD and Physint. We hire employees based on the number of projects, and we had two. If we lose one contract, then, it turns out, I will have to lay off everyone who worked on Physint? In the end, the studio could simply collapse because we would run out of working capital.
After this conversation with Sony, Kojima was determined to continue developing Physint by any means possible. Immediately after the call, he began refining the project's concept and also decided that only a limited circle of people would know about the funding cancellation; employees were not immediately informed.
Then he began looking for an alternative source of funding. That's how he got in touch with Xbox — contacts were already established, as Kojima Productions works with this company on OD:
I made a full pitch [presentation] for Physint to them. And their first reaction was, 'This pitch is fantastic. We've never seen anything like it!' That's how our collaboration with Xbox began.
The target platforms for Physint are still in question — Kojima cannot confirm a PlayStation release yet; the decision depends on Xbox. The decision regarding the game engine has also not yet been made: the developers are experimenting.