It has been a busy month for Hideo Kojima, following Sony’s decision to stop backing the development of the director’s upcoming title PHYSINT and the reveal of Kojima Productions’ recently announced publishing partnership with Xbox. PHYSINT is considered by many as the spiritual successor to the Metal Gear franchise.
But although the worst seems to be over, there’s still a lot more work to be done in the upcoming spy thriller, with Kojima himself revealing in an interview with The Washington Post that they have yet to narrow down the project’s engine choice. The title’s initial game and plot concepts, however, are already done, with the production of 3D models being currently on the way.
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The interview also revealed new behind-the-scenes details regarding Sony’s decision to cut the funding for the upcoming title, with Kojima being, according to it, made aware of it via a Zoom call back in June 2026, leaving the director in shock as he thought about the future of the studio and his employees. ”I was just shocked and surprised,” he said. “I didn’t have any anger or sadness. I was just thinking, ‘What should I do?’ It’s a big problem for us, and I couldn’t tell staff at the time.”
The title’s initial game and plot concepts are already done, with the production of 3D models being currently on the way.
Contrary to the bombshell publisher change, PHYSINT’s engine situation does not seem to be a surprise for most fans or members of the industry, as the Decima Engine, used by the developer in both Death Stranding and 2025’s Death Stranding 2: On the Beach, was heavily rumored to remain a Sony-exclusive.
Even if that’s the case, it’s also vital to point out that no official announcements were made regarding the studio’s ability or inability to use the engine in the new project. What we know for sure is that the reveal indicates that fans might still need to wait a couple of years to see PHYSINT’s Hollywood-starred cast fully realized.
As if to show the world that PHYSINT is very much alive, Kojima Productions made a surprise appearance in the September 17 XBOX Tokyo Game Show 2026 broadcast and revealed Bill Skarsgård to be the choice for its heavily rumored leading role.
“I’m delighted to confirm the lead role for PHYSINT will be Bill Skarsgård,” Kojima said in an official blog post. “We are both long-time fans of each other’s work, and we’ve decided to embark on this new adventure together. The costume fittings, scans, and camera tests we conducted with Bill and Charlee earlier this year gave me tremendous confidence in the direction of the project.”
Skarsgård is known for his work as Pennywise in the newest adaptations of Stephen King’s IT, as well as for bringing the titular vampire to life in Robert Eggers’s 2024 Nosferatu. He joins the game’s already star-filled cast, including Furiosa: A Mad Max Saga’s Charlee Fraser, Godzilla: Minus One’s Minami Hamabe, and Don Lee, the star in the now-seemingly-in-limbo Gang of Dragon by Like a Dragon’s Toshihiro Nagoshi.
Why Did Sony Back Out of The PHYSINT Deal?
Image Via Kojima Productions
Even if no concrete details have been disclosed, a report by Bloomberg on September 11, 2026, revealed that Sony’s decision might have been influenced by missed deadlines, the title’s high cost of production, and concerns regarding both exclusivity and future sales.
What followed was a statement by Kojima Productions on social media, seemingly responding to the publication. In it, it stated that ”None of the claims written came from any official or on-the-record source and as such we encourage you to take them with a dose of skepticism.” They then closed out by revealing that although the situation was indeed serious, ”we want to reassure you all, for the record: that the studio is in a healthy, profitable state, development for PHYSINT continues to move forward with XBOX, and our relationship with PlayStation remains strong.”
Advertised for Kojima himself as a culmination of more than 40 years of his career and a project set to redefine the action-espionage genre, PHYSINT was announced in January 2024 and has yet to receive a release window. The title is also not the only upcoming release featuring a partnership between his studio and Xbox, with the production behind the thriller OD: Knock progressing smoothly.
The game will be Kojima’s first dip into horror since the cancellation of Silent Hills. Fittingly, just like the latter would include input from Guillermo del Toro, OD is the fruit of a partnership between Kojima Productions and Oscar-winning director Jordan Peele.
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