Over the past few weeks there's been a lot of controversy between Hideo Kojima and Konami, and neither side will open up and explain what's happening. We know that Kojima will stay on to finish Metal Gear Solid V: The Phantom Pain, but appears that won't be the case with Silent Hills. According to photojournalist Matt Hackney, Guillermo del Toro (who is co-directing the game with Kojima) told the crowd at the San Fransisco Film Festival last night that Silent Hills has been cancelled. We'll keep our eyes peeled for official confirmation.

UPDATE:

Amid mounting speculation that the Silent Hills project may have been cancelled, Konami has issued a statement that suggests the game is, at the very least, undergoing major changes.

When the Silent Hills project was first announced, Walking Dead star Norman Reedus was named as its lead actor, lending both his face and voice to the game. But on Monday Konami confirmed to GameSpot that "our contract period with Reedus has expired," following the actor's claims on Twitter that the entire project has been axed.

Regarding those rumours, Konami wouldn't discuss the Silent Hills project specifically, but said: "We will continue to develop the Silent Hill series."

Grave concerns over the Silent Hills game began in March, when GameSpot revealed that Hideo Kojima--Konami's most renowned developer and a director on the project--is preparing to leave the company once work on Metal Gear Solid 5 is completed.

In the weeks that followed, a slow trickle of revelations continued to suggest that Kojima Productions' relationship with Konami has become complicated. In late March, it emerged that Kojima's regular podcast series was put on hiatus. Then on Sunday, players discovered that the PS4 game P.T.--a playable teaser that was essentially a grand marketing initiative to publicise the Silent Hills Project, would be removed from the PlayStation Store in a matter of days.

Director Guillermo del Toro, who was initially signed as a co-director of Silent Hills, was reported to have said on Sunday that his collaboration with Konami "is not gonna happen."

Konami has had a rough stretch lately. Confusion still surrounds Metal Gear creator Hideo Kojima's status with the company. Now, the publisher faces intense scrutiny over the status of another hotly anticipated title.

Over the weekend, an alleged comment from director Guillermo del Toro surfaced that indicated his involvement with Silent Hills had come to an end. Following that, actor Norman Reedus (The Walking Dead) indicated that the project was dead (though it was unclear if he was reacting to internet furor or if there are more details of which he is aware). This followed an announcement that the playable trailer for the game (P.T.) will be removed from the PlayStation Store.

"P.T. is being pulled from the PS store since it was created as a playable teaser for 'Silent Hills', but the distribution period and license usage within the demo have both now expired," a company representative told us via email. "Also, in response to what Del Toro said during the Q&A, Konami is committed to new Silent Hill titles, however the embryonic 'Silent Hills' project developed with Guillermo del Toro and featuring the likeness of Norman Reedus will not be continued."

This put to bed the rumors of the past weekend, cementing them as reality. For those that have yet to play P.T., you'd best download that before it's gone.

http://www.gameinformer.com/b/news/archive/2015/04/27/konami-confirms-silent-hills-cancelation-but-series-still-alive.aspx