Why PlayStation Ditched Hideo Kojima's Physint

Hello, One Take Shrier here. This week, Hideo Kojima, the well-known Japanese game designer, announced that his next big espionage action game, a spiritual successor to Metal Gear Solid, the game series that made him famous, will no longer be published by PlayStation. PlayStation pulled out of the deal, and instead the game, which is cenamed Fizzant, will be going to Xbox. But what he didn't say is why it happened. PlayStation also provided a comment. They said that they were pulling out of the deal. Wish Kojima the best. Intended to collaborate with him further moving forward, etc., etc., but they did not say why. Well, that's what I'm here for, to get you the answers you have been craving. I this week I made some phone calls. I spoke to people across all different sides of this snafu in an attempt to figure out why PlayStation

pulled out and how this all happened and why Xbox was interested because that's a whole another part of this is that Xbox has been making a lot of their own cost cutting and business overhauls under new CEO Asha Sharma. So why are they interested in this Kojima project? And I have some answers for you that I will offer. Um, we're going to go through all three sides of this story and try to kind of give the perspective of all of them because I have all three. Let's start with PlayStation. So, PlayStation has been working with the Deo Kushima for a very long time. Since the 1990s, Kajjima's Breakout title, Metal Gear Solid one, was a PlayStation 1 exclusive. It was one of the best looking games on the platform. Helped solidify the PlayStation as a graphical powerhouse console um and just kind of helped propel Kojima to become this uh legendary industry figure. The series stayed PlayStation exclusive for a very long time up until the modern era with Metal Gear Solid 5, which launched on the PS4 and the Xbox. So Kojima has a

long history with PlayStation. And in 2015, after Kojima had an acrimonious departure from Konami, the company behind Metal Gear, PlayStation was very quick to swoop up his new studio. They didn't buy the studio. The studio remained independent, but they announced a long-term partnership and a um both a technology licensing and a funding agreement for what would become Kojima's first game as an independent developer, which was called Death Stranding. PlayStation would then go on to fund and publish the sequel as well, Death Stranding 2. But neither of those games was quite as commercially successful as PlayStation wanted them to be. I don't have the exact numbers, and I don't know if like if you move some numbers here and there, you can make them profitable, but neither of them lived up to PlayStation's revenue expectations. Neither of them were big hits. The first

game sold better than the second one, but a lot of the first game sales were actually at a discount, and a lot of them were on PC, which PlayStation did not publish. The first game actually had other versions of the game that were published on other platforms. Another factor here behind the commercial performance is that often you might look at a Kojima game and say, well, look, it might not sell a billion copies, but having this name associated with our brand helps us sell consoles, helps us build this prestige. But because these were timed cons exclusives, both of these games and Fizzant was was following the same path. Um they are not uh quite the same drivers of console sales that a permanent PlayStation exclusive what would be at least in Sony's mind and the the perspective of Sony management. Another interesting thing that happened along the way during this kind of 10-year period between when 11-year period when Cojima went independent and now is that a lot of the people who Kojima was closest with and had strong relationships with at Sony

and PlayStation actually left the company. There was some tons of of uh executive departures and turnover over the last few years. So, that was a factor as well. Um, PlayStation did sign on to work on Fizzant. They announced it in 2024. They said they were still planning it. It was very early days and that after they finished Death Stranding 2, they would go into production on this game. But over the last couple of years, as Vizen has been in development, it has been missing milestones. It has been late on deadlines. It has been over budget and it has not been uh living up to PlayStation's expectations, at least according to people who work for PlayStation. This is multiple people I've talked to who are familiar with the business and know what is going on um and are have have an idea of why this all happened. Um, combine the kind of uncertainty about the game's development, the fact that Kojima was then asking for a lot of money, money in the hundreds of millions, the fact that this would not be a PlayStation

exclusive, um, and the fact that it's taking longer and more going to be more expensive than expected and you have the recipe for a game that is going to be cancelled. There were negotiations along the way. There were conversations about can this game be exclusive for longer, that sort of thing. But ultimately, it led to a cancellation. Sony did not want to be involved with this project any longer. Um the other factor here is of course the PlayStation business. PlayStation is in the middle of quite a few crisis at the moment. Um, one is of course the hardware shortage and price uh price influ like price influx, price jumps, price skyrockets, price shocks, let's call it um due to the AIdriven memory card uh memory chip shortage um because AI data centers are buying up all the memory cards and and GPUs and RAM and and storage. Um hardware has gotten way more expensive. The prices of

PlayStation have gone up. Um it's harder to find them. PS5 Pro is reportedly sold out um in the wake of that GTA 6 reveal a couple of weeks ago. So, we're in a climate where PlayStation is not expecting to sell as many PS5s as they did before. And on top of that, PlayStation is preparing for going into a new generation, the PlayStation 6, which we don't know exactly when that's coming, but it's coming within the next couple of years. Two to three years, I think, is a fair fair estimate. That's not inside info. Inside info is that we know it's coming. I don't have info on the the exact timing of it and in fact I I wouldn't be surprised if Sony is still just kind of trying to figure that out. Um although they could have figured it out. Again, that's not inside knowledge. But what I do know is that Sony is facing crisis. Um they are in a process of just kind of re-evaluating everything, trying to maximize profit. I talked in a previous video um the other day about how uh one of the reasons that they have kind of moved on from making discs despite all the constant gamer

outrage that is still going to this day um is because they see the video game industry as a mature market and no longer a growth market and essentially the console industry as a mature market and they are um interested in maximizing revenue per user rather than continuing to try to grow the business by selling as many consoles as possible. So different world for them. And then the other thing is that since 2024, for the last 2 years, since Concord really, but there are other factors too, PlayStation Studios has had a very different kind of production um infrastructure in place. They have created more, let's say, rigorous milestones. milestones are essentially if I'm a game developer, I talked about this, go check out my video about um what publishers do. For more about this, but essentially if I'm a game developer and I'm working with a publisher, a publisher will ask for check-ins every so often and those are called milestones and I'll have to deliver a build, deliver a demo, deliver designs, whatever it is. Um and the publisher will check it out and they'll say yes or no. And so, uh, PlayStation has enacted this way more rigorous

process with Milestones largely to prevent another Concord from happening, another big flop like that from happening. And so, they have, as a result, they've been cancelling more projects. They've been retooling more projects. I recently reported that they are retooling Horizon Hunters Gathering, the live service Horizon game. And um I think that's part of this too is that this more rigorous kind of production uh infrastructure led to them evaluating Kojima's game and maybe a few years ago they would have said okay yeah let's just keep it going. Now they said no we don't want anything to do with Fizzant anymore. So in June they told Cojima we're pulling out. Cojima said publicly hey we have um we we spent the last three months looking for a new partner and we landed on Xbox. So from Cojima's perspective I mean there are a few things here. One is that um from Cojima's perspective, uh Kojima Productions perspective at least um games are always late. Games are always uh uh overbudget in some way or another.

Um, and the result, especially in uh the case of a proven creator like Hideo Kushima, the result is is well-reed, well-received games that um are nominated for awards that people seem to really love and that bring prestige and um help uh your console grow and uh just help you stand out in the market. Um, from Kojima Productions perspective also, I mean, this is not the way you kind of treat this person, this creator who has been working with the company for decades and decades, which kind of plays into the point I made earlier about some of the people at Sony who Kojima worked closest with before no longer being there. It's kind of a different a different regime at Sony these days, different priorities at Sony these days. So, that's part of it, too. Um, I think the question of missing deadlines and being over budget is an interesting one. It is 100% true that all video games are constantly missing deadlines and over budget. Um, I also think there might be some personality conflicts here, some personality

questions. I think that um the question is how far over budget, how far over deadline. These are nuance questions and complicated questions and ultimately PlayStation decided for them it was not worth it. Kojima of course not uh and his Kojima's team of course not thrilled um about that but they landed on a partner that actually makes for a good fit which is Xbox and now Xbox is a good fit um at least in Xbox's mind and Cojima's mind for a few reasons um despite the fact that we've seen Xbox going through its own business turmoil and prioritization of profits. So Asha Sharma, who came in in February and took over for Phil Spencer, has been very public about her desire to turn around the Xbox business, and she's talked about her new vision for um for the the organization. Um one of the things she's talked about is doubling down on the biggest franchises like Fallout and Elder Scrolls and Call of Duty and Warcraft, etc., etc. Um which actually raises some questions about this because

here is Kojima making this brand new IP that nobody's ever heard of. um what is the logic behind that? Well, for her I think there are a few things. One is um that a big part of their strategy is excuse me a big part of their strategy is appealing more to um China and Japan and Asian markets and Kojima of course being based in Japan. Um his games I think are are can be big um in Asian markets. Uh I think uh Death Stranding had some uh had some success in China as well. Um, another is um film TV. Uh, and Xbox already had this deal in place to publish OD. And now as part of this new deal with Fizzant, they are actually getting the film TV rights for both Fizzant and OD. And since Cojima is is considers himself half movie maker anyway and works with all these bigname celebrities and has all these deals, various deals in place to try to get all these films and TVs TV stuff off the ground. For Xbox that makes a lot of sense. Um, people kind of laughed at this idea um that Asha Sharma said a

couple months ago about reaching a billion people a day with Xbox properties. I think people misinterpreted that to mean a billion players a day, which was not entirely what she said. What she actually said was a billion people a day, which involves both players through their games and also people who are watching things. Um, and so watching is a big part of that strategy, too. And Kojima brings that. But there's another big factor. I alluded to this a little bit earlier, but this is an important one. Earlier this year, I reported that PlayStation was no longer going to release its games, at least its single player games on PC. It is going to still release its multiplayer games on PC, but single player games will be PlayStation exclusive. So, what does that mean for something like Fizzen? Well, Death Stranding 1 that was released before PlayStation started its PC initiative. So for Death Stranding 1, Kojima Productions actually worked with another publisher to release their game on PC and it found a lot of success there. It sold sold a decent number of copies on

there. Um, which helped Cojima Productions make a profit off of it even if PlayStation didn't make so much of a profit off of it. Um, second one was actually published on PC um by PlayStation Productions and they benefited from that, but PlayStation has since withdrawn from that. So for Fizzant, it would essentially be a time PlayStation exclusive and then it would be released on PC, at least on the original version. Either Kjima would do it themselves as a publisher or they would work with another publisher, whatever that might look like. Sony and PlayStation would not get a piece of that. Whereas Xbox, which is now taking over the publishing rights of this game, will publish it on both Xbox and PC because their strategy is release all their games on PC in contrast to Sony and PlayStation. So that's a big revenue source, especially if your Xbox games do not sell quite as well because there aren't as many people who own Xboxes as PlayStations. So PC revenue is a big one, especially um outside of the US where there's a huge PC market. China

has a huge PC market, etc., etc. So for Xbox, it makes some sense. I think there are definitely questions to be asked about the timeline for this game, the deadlines for this game, if it will come to fruition, if the current Xbox regime will even still be around by the time this game comes out in 2030 or whatever. That's just a guess, not inside info. I don't know when this game is actually going to make it to market, but um but for them, they they they have some some kind of business sense here. And I'll read you a quote um from my Bloomberg story about this, which as always you can check out in the show notes. This is what an Xbox spokesperson told me, which is quote, "Betting on Kojima is an easy call. We believe in his team's ability to build AAA games with groundbreaking new IP, and we believe in OD Fizzant and our growing partnership." Um, I certainly if I worked at Xbox at one of the company at one of the studios that was um divested or had a game canled or

was laid off, I would certainly be raising an eyebrow at this because making a big risky investment into um Cojima, a big an investment of hundreds of millions um certainly beg some questions there, but they see it as a bet worth taking. So hopefully that helps people understand a little bit about why this all happened. Um we are seeing a new direction for PlayStation in a lot of ways. We are certainly seeing a new direction for Xbox and soon we will be seeing a new direction for Kojima Productions as they work on Fizzant. I think that the big factor here and the reason that this has made so many headlines is that this isn't just a new kind of um more niche game where you carry around packages and do deliveries and stuff. This is a spiritual successor to Metal Gear Solid, which of course is Kajjima's most successful, biggest franchise. So, if this hits, if this delivers on what

Metal Gear Solid delivered, um that could be really special. And I I I I think that's why there were so many kind of uh player reactions, heated player reactions to this news. This is an OD, which is kind of a weirdo experimental horror game. This is like supposed to be the spiritual successor to Metal Gear Solid. So, we shall see what happens with it. We'll see um how long it takes this game to come to fruition, if it ever does. But um very clear that change is a foot. And hopefully this helps you understand why. Now I am heading off to Japan um next week. So you might not see me making any more videos for a little bit. Then I have another trip planned the following week. So I might might take a little bit of a break here from One Take Shire. But we'll see what I can do. Maybe I'll I'll shoot some some some walk-in video while I'm in Japan. That could be kind of fun walking around and and talking. I'll see if I can get that going. Um, so stay tuned for that and I

will see you next