PlayStation just can’t help itself, going about a month without wandering into another hot pile of controversy. Ending physical disc production for new PS5 games starting in 2028, shutting down studios, cutting hundreds of jobs, and quietly pulling back from PC ports it spent years building up.
Heck, they even wound up Destiny 2’s live service updates just as Bungie’s next big bet, Marathon, started struggling too. I mean, even asking “what the heck is going on, Sony?” feels less like a hot take and more like a standing appointment.
And now, somehow, their pioneer dev Hideo Kojima has wandered into the blast radius. Earlier this week, Sony announced that they’re “stepping away” from PHYSINT, Kojima’s long-awaited return to the action-espionage genre he built his name on with Metal Gear – while insisting the relationship remains as strong as ever.
On the flip side, Kojima being Kojima fired back unapologetically and revealed that Sony threatened to cancel PHYSINT in June 2026, and his team spent the rest of the summer shopping around for a new publisher.
Three months later, that publisher turned out to be PlayStation’s archenemy, Xbox, which is also expanding its relationship with Kojima Productions into film and TV. While its exclusivity and platform-specific details are unconfirmed, the headline says it all: PlayStation takes another L while Xbox is cashing Ws in green.
PlayStation Is in Its Mess Around and Find Out Era
Remember how PlayStation and Kojima’s relationship used to look like a match made in heaven? It dates all the way back to 1998. That’s when the original Metal Gear Solid, one of the best stealth games, showed off just how cinematic a video game on a PlayStation console could be, and MGS 2, 3, and 4 kept that streak going.
After Kojima’s dramatic exit from Konami in 2015, Sony stepped in to heal the wounds and struck a deal with a newly formed Kojima Productions within the year, with PlayStation executives welcoming the veteran into what they called the “PlayStation family.” Guerrilla Games even handed over its Decima Engine so Kojima’s team could build on it. This proved that Sony was genuinely investing most of its infrastructure in one creator in hopes of the next gaming revolution.
And so, Death Stranding was shipped in 2019 and opened to a genuinely mixed reaction as a “walking simulator”, even with all the rope physics and celebrity cameos. However, it finally found its audience after a while, and following that, DS2: On the Beach was released on PS5 in June 2025, which follows the same story. Kojima truly admired Sony, so much so that Kojima Productions’ Tokyo office is right across the street from Sony’s corporate office.
In between the two releases, in January 2024, Kojima stood beside PlayStation Studio boss Hermen Hulst to reveal PHYSINT: his first new action-espionage IP since walking away from the Metal Gear Solid series nine years earlier. “One that I’ve been encouraging him to reinvent for years,” Hulst said at the reveal, promising Sony would fully back him with its latest tech.
Even Kojima said that in January 2026, he will celebrate the 40th anniversary of his game production career and that he’s confident that PHYSINT will be the culmination of his work over the years with the genre.
17 months after the PHYSINT reveal, in May 2025 at Kojima Productions’ 10th anniversary event, Hulst was still crediting him directly, saying it was impossible to reflect on PlayStation’s success without recognizing “the role of Kojima-san and the worlds you’ve built.”
So naturally, me being a Kojima fan, woke up, saw the news, and thought to myself, how the heck did “welcome to the family” turn into “we’re cancelling your game”? And that’s when it hit me. PHYSINT didn’t get cancelled in a vacuum or in a rush. It got cancelled after two years of Sony making increasingly baffling calls about its own first-party future.
From a strictly financial perspective, Sony’s decision is easier to understand, so I’ll play devil’s advocate for the moment: estimates put the two Death Stranding games at roughly $413 million in revenue for Sony, with DS2 currently returning less than its predecessor despite its hefty $100 – $200 million development cost.
But the franchise’s run on Steam, particularly in China, also made Kojima a valuable bridge to an audience PlayStation barely reaches on its own, making the optics of walking away at this moment especially awkward. But it doesn’t alone merit giving Sony the benefit of the doubt.
You see, in Feb 2024, Sony laid off about 8% of its workforce, affecting around 900 employees across studios like Naughty Dog, Insomniac, Guerilla, and Firesprite, and while it had the hammer out, Sony used the same swing to drive the final nail into London Studio, shutting it down completely.
Then came Concord – a reported $200 million live-service bet that Hulst and newly appointed co-CEO Hideaki Nishino watched implode within two weeks of its August 2024 launch, its Secret Level tie-in airing months after the game was already dead.
January 2025 brought two more cancelled live-service projects, including a God of War title that helped sink Bluepoint Games entirely a year later – the same month Nishino was promoted to sole CEO, and Hulst was folded underneath him, still running the studio business that manages studios like Kojima Productions.
Bungie’s post-Destiny bet, Marathon, also came along, which has since lost 90% of its launch player base, and by May 2026, Hulst was even walking back on Sony’s PC strategy, thus keeping single-player games exclusive to PlayStation consoles.
And then came the biggest blow. On July 1, 2026, Sony announced the end of physical disc production for new PlayStation games from January 2028. Kojima called it “really sad,” saying he’d grown up with physical media and had started stockpiling Blu-rays in case movies were next.
Fans were even louder. An online movement with #NoDiscNoBuy rose, and PS users organized a “PlayStation Blackout” last month where there were no logins, no purchases made on their PS5 consoles, and a full week of collective silence was observed, aimed squarely at Sony’s revenue sheet. But it didn’t stop there – fans continued to echo “No Disc No Buy” and “We Want Destiny 3” in every PlayStation broadcast chat, whether it was State of Play or a game showcase.
PlayStation is obviously having quite a rough year, as it has become everyone’s designated punching bag and the account that everyone quote-tweets for a free laugh. Remember Domino’s announcing a digital-only pizza to mock Sony’s decision? Yeah, it stung Sony, didn’t it?
OH(D) Knock Knock Xbox, It’s PHYSINT
But here’s the part that should sting most: Xbox didn’t just capitalize on the moment and send Asha with a checkbook. The relationship between Kojima and Xbox was already quite solid. Back in June 2022, Kojima appeared at the Xbox and Bethesda Games Showcase to announce a cloud-powered project with Microsoft that was later revealed at The Game Awards in 2023 as OD.
That reveal featured genuine Hollywood names – Sophia Lillis, Hunter Schafer, and Udo Kier – with Jordan Peele attached to help shape the story alongside Kojima. By 2025, Xbox was openly discussing OD’s production with Kojima Productions on Unreal Engine, and a genuinely unsettling OD Knock teaser dropped in September 2025, which thrilled fans even more.
So when Sony decided to walk away from PHYSINT in June 2026, Xbox was already there and had front-row seats to how Kojima works and plans his game releases.
On September 9, Xbox and Kojima Productions confirmed that their existing partnership with OD would now cover PHYSINT too, with the two companies also collaborating on film and TV. Xbox CEO Asha Sharma framed it simply: “creators deserve the freedom to choose where their ideas get made,” and that Xbox was honored Kojima chose to bring his ambition to challenge convention to them.
But one can’t help but ignore that the timing is uncomfortably tight. Sony pulled out of PHYSINT in June; it announced the end of physical discs in July, and shortly following PlayStation’s decision, Kojima publicly voiced his sadness over Sony’s disc decision.
On the sidelines, Xbox was testing its disc-to-digital feature, which is now live for Xbox Insiders, and it lets players claim a digital license of a game from a physical disc they already own, without disabling the disc itself.
While there’s no confirmed link between PHYSINT’s cancellation by PlayStation and Sony’s physical media plans, fans can’t help but connect the dots when dates line up this close, even if it’s purely speculative. Maybe PlayStation didn’t want to have another media disaster on their hands when PHYSINT launches around 2030, and Kojima fans come running for a disc; or maybe they were ready for it, but just had to censor some media while they were at it – am I right?
Sony Just Stranded the Man Who Taught Us Why Connections Matter
All in all, when it comes to PHYSINT, it was Kojima’s first actual return to the action-espionage genre since Metal Gear, arguably the most obvious spiritual successor to the work that built PlayStation’s reputation for cinematic, big-swing games in the first place. And now, Sony handed it to another console that is already making some huge strides in winning back its community’s trust.
I’ll be honest here, about where I’m coming from: I’ve been a PlayStation loyalist ever since the PS2 era and an MGS and a Kojima fan for a while now. I’ve defended this platform through Vita’s slow death, through unnecessary price hikes for its consoles, through every “switch to PC” comment I’ve rolled my eyes at. That kind of loyalty is exactly what Sony has spent 30 years cultivating and apparently exactly what it’s decided it can afford to burn through.
Play Has No Limits is still printed on the box. Somewhere along the way, Sony started applying that promise to how far it would push its own fans, rather than how far it would push its games.
I think that when a studio that built its entire identity on backing ambitious creators can’t hold onto the single most unpromising video game creator in the industry, the brand is just lying to itself. And I say that as someone rooting for it to prove me wrong. I’ll still buy Wolverine on my PS5 and a limited edition controller to prove that the console that bred the passion for gaming in me is still good enough to play with, even if it has limits now.
But right now Sony isn’t managing a PR problem; it’s managing a credibility collapse of its own making, one decision at a time. A company that can lose Hideo Kojima has no business lecturing its fans, partners, or even its dev team about vision.
Sony lost PHYSINT to its own inability to get out of its own way, and if PlayStation wants to know why longtime fans like me are done giving them the benefit of the doubt, it doesn’t need an analyst. At this point, the company needs a mirror, and maybe a little less confidence that fans will keep showing up no matter how badly it treats the people who made it what it is.
