Sony's decision to cease funding for Hideo Kojima's upcoming game, Physint, and its subsequent partnership with Xbox, may stem from the financial performance of the Death Stranding franchise, according to industry analyst Rhys Elliott of Alinea Analytics. This move has raised questions about Sony's relationship with the veteran game designer, especially as the company navigates other public relations challenges.
Elliott estimates that the first Death Stranding cost approximately $100 million to develop, with its sequel, Death Stranding 2: On the Beach, likely falling in the $150 million to $200 million range due to extended development cycles and the impact of COVID-19. When factoring in marketing expenses and the opportunity cost of reallocating developers from other projects, Elliott suggests the franchise has "almost certainly broken even--but not by much."
The financial performance of Death Stranding 2: On the Beach has been particularly scrutinized. The game has reportedly sold 2.5 million copies across PlayStation 5 and PC, generating $170 million in revenue. However, this figure is considered insufficient by Elliott, given the extensive development time and the costs associated with featuring several prominent celebrities. Sales for the sequel are also reported to have significantly slowed post-launch, even with a discounted price of $40.
In comparison, the original Death Stranding sold around 5 million copies during its lifecycle, benefiting from deep discounts that brought its price down to $20 at times. Over a decade, Kojima Productions has released two games that have collectively generated approximately $413 million in revenue. While this sum is substantial, it represents a relatively small contribution to Sony's overall revenue of over $80 billion in its 2025 financial year.
Elliott indicates that Sony is adopting a more cautious approach to funding large-budget projects, citing previous high-profile failures such as the canceled Concord, which reportedly resulted in over $300 million in losses. Other titles like Marathon, Saros, Marvel Tokon, and Lego Horizon Adventures have also underperformed, contributing to Sony's wariness regarding future investments. The company was reportedly reluctant to invest hundreds of millions of dollars in Physint, a game in which it would not hold ownership, particularly with its potential status as a timed exclusive for PlayStation.
While parting ways with Kojima may offer short-term financial relief for Sony, it presents a public relations setback for the company. Conversely, Xbox's support for Physint represents a significant public relations victory for Microsoft's gaming division, potentially aiding its efforts to regain market momentum.