Kojima Productions Defends PHYSINT

Kojima Productions has publicly responded to reports surrounding the sudden change in publishing plans for PHYSINT, asking fans to treat speculation about the project with skepticism. The statement comes shortly after Sony stepped away from the game and Xbox became its new publishing partner.

The situation has generated plenty of discussion across the gaming community, particularly after a Bloomberg report suggested that budget concerns, missed deadlines, profitability questions, and exclusivity disagreements contributed to Sony's decision. Kojima Productions has now directly disputed the sourcing behind those claims.

Here is what is officially known about the PHYSINT situation and where the project stands now.

Kojima Productions Addresses the Reports

Kojima Productions said it would normally avoid responding to internet speculation. However, the studio decided to speak out because the claims went beyond ordinary rumors and, in its words, affected its relationship with PlayStation, the commercial performance of the Death Stranding franchise, and the production planning behind PHYSINT.

The studio's central point was straightforward: none of the claims in the report came from an official or on-the-record source. It therefore encouraged fans to approach the information with skepticism.

That does not automatically establish what caused Sony's decision. Instead, it means there are currently different accounts of the circumstances surrounding the publisher change, with some details coming from anonymous sources and others directly from Kojima Productions.

What Bloomberg Reported About PHYSINT

Bloomberg previously reported that Sony had stepped away from PHYSINT because of concerns involving the project's budget, potential profitability, deadlines, and exclusivity.

According to the report, people familiar with the project said PHYSINT had missed deadlines and was expected to exceed its budget considerably despite being years away from release. The report also claimed Sony was reluctant to commit a large investment to a project that might not remain permanently exclusive to PlayStation hardware.

Those details became particularly important because Sony and Kojima Productions initially did not publicly explain why their publishing arrangement had changed.

That silence naturally left room for outside reporting and speculation.

The Studio Says It Is Financially Healthy

One of the strongest points in Kojima Productions' response concerned the studio's financial position.

Kojima Productions stated that it is in a “healthy, profitable state.” The statement directly pushes back against suggestions that the PHYSINT situation reflects broader financial problems at the developer.

For fans of blockchain games and the wider gaming industry, this is an interesting reminder of how much can happen behind the scenes on major AAA projects. Development budgets, publishing agreements, platform strategies, and intellectual property ownership can all influence a game's future long before players see a finished product.

In PHYSINT's case, the public record still does not provide a complete picture of the private negotiations.

PHYSINT Is Moving Forward With Xbox

Whatever happened between Sony and Kojima Productions, the most important update for players is that PHYSINT has not been canceled.

Kojima Productions confirmed that development continues with Xbox. The developer had already announced Xbox as the project's new publishing partner earlier in September, describing the collaboration as an expansion of its existing relationship with Microsoft through OD.

The project was originally associated with PlayStation, but Kojima Productions said it received notice from PlayStation Studios in June that Sony intended to cancel the project. Kojima then spent roughly three months searching for another partner before announcing the Xbox collaboration.

For players following blockchain games and the rapidly changing AAA industry, the situation is another example of how publisher relationships can dramatically reshape a game's development path without necessarily ending the project itself.

Bill Skarsgård Joins the PHYSINT Cast

The timing of the controversy is especially notable because PHYSINT has simultaneously been moving forward publicly.

Kojima Productions recently confirmed Bill Skarsgård as the lead actor for PHYSINT. The announcement also introduced a new poster featuring Skarsgård and Charlee Fraser.

The project already has several notable performers attached, including Don Lee and Minami Hamabe. Kojima said costume fittings, scans, and camera tests with Skarsgård and Fraser had already taken place earlier in 2026.

The casting announcement provides a concrete sign that PHYSINT remains an active production rather than a project sitting indefinitely in development limbo.

PlayStation and Kojima Productions Remain on Good Terms

Another important part of the statement concerns Sony.

Despite PlayStation no longer publishing PHYSINT, Kojima Productions specifically said its relationship with PlayStation remains strong. That is significant because the publisher switch could easily have been interpreted as the end of the long-running relationship between the two companies.

Sony itself previously said that it continued to have great admiration for Kojima's vision and looked forward to continued collaboration with his independent studio.

Whether that eventually leads to another PlayStation project is unknown. For now, however, the public statements from both sides indicate that the publishing change does not necessarily represent a complete breakdown in their professional relationship.

What About Kojima's OD Project?

PHYSINT is not the only Kojima Productions project being developed with Xbox.

Kojima also provided an update on OD, the experimental horror project being created with Xbox. Behind-the-scenes footage showed actors Sophia Lillis and Hunter Schafer participating in performance capture work, while Kojima said development was progressing smoothly.

That means Kojima Productions currently has two major projects connected to its Xbox partnership: PHYSINT and OD.

For Xbox, the collaboration represents a significant relationship with one of the industry's most recognizable independent game creators.

The PHYSINT Story Is Still Developing

The latest situation can be separated into several confirmed facts and unverified claims.

Confirmed publicly:

• Sony stepped away from publishing PHYSINT.

• Xbox became the game's new publishing partner.

• Kojima Productions says PHYSINT development continues.

• The studio says it is in a healthy, profitable state.

• Bill Skarsgård is the game's lead actor.

• Kojima Productions says its relationship with PlayStation remains strong.

• OD is also continuing development with Xbox.

Still disputed or not publicly established:

• The precise reasons Sony decided to leave PHYSINT.

• Whether budget overruns or missed deadlines were decisive factors.

• The extent to which exclusivity discussions influenced the decision.

• Whether the project's commercial expectations played a major role.

For now, Kojima Productions has made its position clear: the reports about the reasons behind the publisher switch should not be treated as confirmed facts. PHYSINT is continuing with Xbox, its development team remains active, and the project has already entered a new chapter with Bill Skarsgård taking the lead role.

The mystery surrounding Sony's departure may continue for some time, but the future of PHYSINT itself looks much clearer: the game is still moving forward.