PlayStation has reportedly canceled its ambitious next-generation project, Physint, developed by Metal Gear Solid creator Hideo Kojima, with analysts pointing to the sales performance of Death Stranding 2: On the Beach as a potential reason for the decision. The project is now set to be developed in partnership with Xbox.
This move by Sony is seen as a significant blow to its public image, particularly following an earlier announcement of a collaboration between PlayStation Studios boss Herman Hulst and Kojima. The decision also comes amidst ongoing fan dissatisfaction with PlayStation's recent initiatives, such as the phasing out of physical media and the closure of the Destiny 2 development studio.
Dr. Serkan Toto, CEO of Kantan Games, suggested that the steep sales decline from the first Death Stranding to its sequel may have been enough to cause Sony to reconsider its commitment to Physint. While official sales figures for Death Stranding 2 have not been released, estimates from Alinea Analytics place the figure at 2.5 million copies. This is a notable decrease compared to the original Death Stranding, which had approximately 20 million players by March 2025, including those who accessed it through subscription services or promotional giveaways. Kojima Productions stated in July that the franchise had reached a cumulative 27 million players across both titles.
Analysis from Alinea indicates that Death Stranding 2 sales have slowed considerably, and that discounts have failed to significantly boost the game's performance. The revenue generated by the sequel also remains lower than that of its predecessor, painting a picture of a franchise that has not built upon the success of its initial installment. Given the substantial development costs and the involvement of A-list actors, Sony may have determined that the financial risks associated with another large-scale Kojima production were too high.
For Microsoft, acquiring Physint represents a considerable public relations victory. The project is now positioned as a marquee title for Xbox's next-generation efforts, potentially as a console exclusive. This move could help offset recent negative press surrounding layoffs and studio closures within Microsoft's gaming division.
Rhys Elliot, an analyst at Alinea Analytics, commented that while the decision might not look favorable to core gamers, he understands Sony's financial perspective. He estimated that the first Death Stranding cost around $100 million to produce, with its sequel costing between $150 million and $200 million due to extended development cycles and factors like COVID-19. Elliot suggests that the franchise has likely only just broken even, especially when considering marketing expenses and opportunity costs.
Elliot further pointed to recent high-profile misses for PlayStation Studios, such as the cancellation of Concord (estimated at over $300 million) and softer sales for titles like Marathon, Saros, Marvel Tokon, and Lego Horizon Adventures, as indicators of a more cautious approach to big-budget investments. These financial concerns, coupled with the negative optics of losing a high-profile project like Kojima's, present a complex situation for Sony.
Christopher Dring of The Game Business noted on X that signing a Kojima game is less about profit margins and more about credibility, making this a significant win for Xbox.