One of the people who's been hitting the headlines for their reaction is Shuhei Yoshida, who was the President of SIE Worldwide Studios from 2008 to 2019. His social media post translates to "wow, that surprised me...", and he also relayed to someone else that he was "surprised" by the news:
He's not the only major industry name getting attention though! Xbox's VP of Games Marketing, Aaron Greenberg, switched his banner image to the logos of Xbox and Kojima Productions following the announcement, and even briefly had a picture of Kojima holding an Xbox Series X on his shoulder in the style of Arnold Schwarzenegger!
This new announcement is clearly a big deal for the folks at Xbox, but it's also shocked people on the PlayStation side that Sony has decided to let the game go. No specific reason has been provided for why PlayStation doesn't want to continue with PHYSINT, so here's hoping Xbox has seen the right kind of potential in the project.
In any case, it could be a few years until we get to see whether PHYSINT can live up to the hype, and there's certainly a lot of pressure on it - it'll either make PlayStation or Xbox look silly when it's finally out in the wild.