While PlayStation is on a streak of one bad decision after the other, I'd give them benefit of the doubt here.
Kojima likes to work unhinged on grand ideas with a tall budget which may stick or not stick at all. So may be Sony didn't like the direction of Physint and decided to dump it.
While Sony may be wrong in judging the game in its early stage, the replacement publisher, Microsoft, has solid track record of terrible taste at creating exclusives.
This situation seems very similar to Konami's frustrations with him a decade ago. Don't get me wrong, Konami too seemed hell-bent on driving into the ground, but Kojima does have a reputation for going over time and over budget. In a world of tightening belts, I wonder if Sony execs felt the same frustration as their counterparts did. We'll see how he fairs with Xbox, which seems even more eager than the other two to shutter things these days.
They're saying on Reddit that DS2's sales fell well below expectations, which wouldn't surprise me. I liked the game a lot but it was a sequel to an already fairly niche game (that I liked even more).
Success is measured in profit for companies and it seems that the numbers of what games like Death Stranding cost compared to what they earned back are not available, so it likely isn't looking rosy.
I'm seeing claims of a cost in the $100M to $300M range, while seeing earnings in the $60M to $120M (as of 2025) range. That's $20M plus in the best case, which is still underwhelming.
Death Stranding 1 at least was a fairly large commercial success. 5 million copies sold, critical darling, and a hugely original put at doing something new.
Kojima likes to work unhinged on grand ideas with a tall budget which may stick or not stick at all. So may be Sony didn't like the direction of Physint and decided to dump it.
While Sony may be wrong in judging the game in its early stage, the replacement publisher, Microsoft, has solid track record of terrible taste at creating exclusives.