PlayStation has done the unthinkable: it has canceled Physint, what will probably be the last game of Hideo Kojima’s career. This was announced along with the news that Xbox will publish the game after Kojima Productions spent four months looking for someone to finance and publish its game. Making the production of a game that should be a safe bet into a completely unexpected odyssey.
But all this says a lot about the current situation of the video game industry. This applies to Xbox and PlayStation as well as Kojima Productions and all the other developers too. Because even though it might seem like this couldn’t be seen coming, we could’ve foreseen it. And even though it might seem like Kojima had an alternative, the reality of the industry is not kind even to someone with his profile.
PlayStation wants to squeeze you dry
PlayStation is in a situation where it no longer pursues brand image or corporate identity: only profits matter. It has made this clear in all its decisions over the last five years. Its focus on live-service games, the closure of its main Japanese studios, the decision to phase out physical releases and its open disdain for communicating with consumers are signs that it has no interest at all in any of these aspects. It only cares about the profits its games bring it.
Dropping Hideo Kojima’s new game is a logical move. While a game from Kojima Productions brings brand value, it doesn’t necessarily bring monetary profits. Not the kind of profits they’re looking for at PlayStation right now. Death Stranding reached 20 million users worldwide by April 2025 including PC players, but at PlayStation they no longer have any interest in releasing their games on PC. And although we don’t have official sales numbers, what we do know is that it turned a profit, but it doesn’t seem like it was a huge seller. For Death Stranding 2: On the Beach we do have figures: it has sold around 1.6 million copies on PlayStation 5 according to Alinea Analytics.
These figures are extremely poor for PlayStation. Days Gone, developed by Bend Studio, a PlayStation subsidiary, was published the same year as Death Stranding and sold 7.32 million copies on PlayStation 4. It was considered a sales failure that led to the cancellation of its sequel, to the studio not getting any other title approved since then, and to Bend Studio having to lay off 30% of its workforce as of June 2025, according to Bloomberg journalist Jason Schreier.
What is considered a success at PlayStation? Whatever sells disproportionately well. The Last of Us has sold more than 12 million copies. Marvel’s Spider-Man has surpassed 22 million. Horizon: Zero Dawn has surpassed 20 million. And of course, games as a service, which can be monetized infinitely, are the company’s ideal: its own Fortnite, which it still hasn’t managed to create, like the failed Concord. But something that gives them prestige or brand image doesn’t matter. Only profit matters. And in that, Hideo Kojima, someone who provides prestige but not enormous profit margins, doesn’t fit Sony’s current strategy.
Xbox needs you to believe in it again
Microsoft is in the exact opposite situation. Its reputational crisis runs so deep that they can’t afford to squeeze their users as if nothing else mattered: they have to prove that their brand matters. That Microsoft, that Xbox, is not only synonymous with bad practices and anti-consumer practices. That they also have good video games and good products. Hence their moves.
In their case, it’s been almost a decade of bad decisions. But now they’re doing it even worse. Their public standing is terrible and they have to make even worse decisions to keep the business afloat because from the parent company, Microsoft, they do not see the video game business as viable. which puts Xbox in a position that’s unsustainable in the short, medium, or long term. That’s why the strategy of the company’s current CEO, Asha Sharma, is a very simple one: minimize damage and make it seem that every move is in relation to users’ needs.
Minimizing damage means making every negative change that affects users in a pernicious way seem like changes that actually are, deep down, positive for them. This is a dangerous strategy, because it can make them feel like they’re being taken for fools, but if your company is on the ropes, it may be better than the alternative. Making it seem that every move is to please the fans is exactly that: winning back disillusioned fans.
That is the reason for acquiring the rights to Physint. Taking advantage of Sony’s reputational crisis to get one of its own. Positioning themselves as saviors of video games, who step in to protect the important and beautiful things, like what is possibly the last video game of Hideo Kojima’s career, no matter the cost. This gives them an image as benefactors of the arts and whitewashes them.
It’s exactly the same thing the Saudis do, for example, with video games and sport: finance and host major events to associate those same events with their country so that they are not associated with the atrocities they’re generally associated with, and thus improve their reputation. Making it logical that where Sony has dropped the ball, because they believe they don’t need goodwill because they have a captive audience they can squeeze, Xbox wants to pick it up, because they need to recover all the reputation they can so that the public stops abandoning them.
Hideo Kojima is no different from you or me
This leaves us with the elephant in the room. Hideo Kojima has been very vocal regarding some of his political ideas, both inside and outside his video games, and he has supported the Palestinian cause on several occasions. Microsoft not only supports Israel, but there is also a boycott against its products, including Xbox’s, because of it. How, then, can Kojima accept working for Xbox? Because at the end of the day we all have to make compromises.
The video game industry is in a horrific state. Getting funding is practically impossible and there is practically no publisher that does not have implications that are anything but questionable in the current situation of the world. Making video games is no longer just difficult, it also entails almost inevitably finding questionable bedfellows. And it doesn’t seem like that’s going to change soon. Something that in Kojima’s case implies an added problem: he is 63 years old. He doesn’t have much time left. Physint may very well be his last game.
Because what alternative does he have? If we take Sony and Microsoft off the board, we’re left with Tencent, Nintendo, NetEase, Electronic Arts, Take-Two, and Epic Games. Tencent has serious accusations of censorship against it and has shut down numerous studios in recent history. Nintendo barely funds external studios. NetEase is in an even worse position than Tencent, and it’s also determined to introduce AI into everything it does. Electronic Arts has been bought by Saudi Arabia. Take-Two has no interest in anything outside its franchises. And Epic Games has had serious legal problems for violating children’s privacy in Fortnite.
There were alternatives, but none was ideal. And Kojima isn’t getting any younger. Maybe he could choose not to make Physint, abandon a project to which he has devoted enormous effort and passion and what may be his last chance to make a big project. But that doesn’t sound like something reasonable to ask of someone. Just as it is not reasonable to ask a person to leave their job because their company is part of a corporation that carries out highly questionable acts.
Because yes: the video game industry is in an extremely delicate situation. It’s in a disastrous state. Great games still come out, but that doesn’t mean the state of the industry is good. Or that its great creatives are not tied to the same contradictions as the rest of human beings. Because Hideo Kojima is no different from any of us. And the decisions of PlayStation and Xbox are completely logical, when thought about from a CEO’s point of view rather than a person’s.
