Kojima Productions' survival story may sound strikingly familiar to struggling

Bryant Francis,Senior Editor,GameDeveloper.com

September 21, 2026

schedule4 Min ReadImage via Kojima Productions

The dust continues to settle on the fallout from Sony Interactive Entertainment's sudden decision to end funding and publishing support for Kojima Productions' Physint, which sent studio founder Hideo Kojima on a three-month race to find new business partners who could fund and publish his spiritual successor to the Metal Gear Solid series—ultimately landing a deal with Microsoft-owned Xbox.

Now in an interview with IGN, Kojima has shared some details about that scramble for funds that seem strikingly similar to many other stories we've heard of developers searching for funding. These common traits show that the financial headwinds and strategic missteps driving the still-rolling video game industry contraction can send celebrity developers and more modest studio heads seeking the same solutions (though the former group has an outsized advantage when it comes to convincing investors of their audience appeal).

Kojima told IGN that his funding race began after a Zoom call with unnamed PlayStation representatives where he was told they "can no longer fund development for Physint." The news apparently shocked him so much that he said his mind went "blank" to the point that he struggles to remember details from the call. What he does recall is that he immediately worried about the financial health of Kojima Productions—which had staffed up to work on two projects: OD and Physint.

"I hire according to how many projects we have, and we have two," he told IGN. "If we lose one contract, I thought I might have to cut all the people working on Physint, right? Or our studio could end up collapsing because we'll run out of cashflow." A few days after Sony delivered the news, Kojima Productions moved some Physint developers onto the OD team and informed them of the search for a new partner. The company has not had to lay off any employees.

It was here he became candid about another loan fueling Kojima Productions: a bank loan. Kojima didn't go into details, but he indicated that sometime after Death Stranding released, he was able to secure a loan from an unnamed bank to bring funding into Kojima Productions. "If they find out that a project has been stopped or canceled, we'd be in big trouble," he said in reference to that.

This led to Kojima, along with company president Shinji Hirano and head of talent Aki Saito scrambling to strategize how they would seek out new partnerships. He said he decided to pitch Physint to new partners not just as a project in search of funding but as a new intellectual property that might attract support from film, TV, and streaming producers.

Said funding conversations apparently did not cover other "support" that Kojima Productions needed, such as technical support, marketing support, organized playtesting, and other duties a publisher like PlayStation would have wrangled. Kojima said it was these considerations that sent him to Xbox, who apparently shared his fervor for developing an original property that would go beyond video games.

Developers everywhere are scrambling for funding

The remainder of Kojima's conversation with IGN concerned his relationship with Sony and PlayStation (eventually leading the studio to put out a statement pushing back against a report from Bloomberg News concerning that dynamic), but the stakes of this drama ripple far beyond these three companies and speak to a struggle facing developers everywhere.

Developers racing to save games after the sudden exit of funding partners is a familiar tale in the game industry—but it's taken on new urgency in the last few years as rolling layoffs, high-profile underperforming games, and uncertain economic conditions driven by AI-driven memory shortages and other world events. This has led some publishers and game funders to pull out of signed deals before games even ship.

In fact, Xbox—Kojima's new financial partner—is one such party that's sent developers scrambling to save their studios. Earlier this year it spun off four subsidiary studios while beginning the process of laying off 3,200 employees. It also pulled support for IO Interactive's unnamed fantasy game, echoing its decision in 2025 to do the same for Avalanche Studios' Contraband. The developers of The Initiative's Perfect Dark reboot apparently launched a similar race for survival similar to Kojima Productions' in 2025 after the studio was shut down, seeking to restart development at Tomb Raider studio Crystal Dynamics.

Unlike Kojima, that team wasn't able to secure such a deal.

Top StoriesFundingXboxPlayStation

About the Author

Bryant Francis

Senior Editor, GameDeveloper.com

Bryant Francis is a writer, journalist, and narrative designer based in Boston, MA. He currently writes for Game Developer, a leading B2B publication for the video game industry. His credits include Proxy Studios' 4X strategy game Zephon, Iron Anchor Studios' Down With The Ship, and Amplitude Studio's 2017 game Endless Space 2.

See more from Bryant Francischevron_right