The cancellation announced Wednesday was a startling blow to the Hollywood studio that has been shaken by hacker leaks and intimidations over the last several weeks by an anonymous group calling itself Guardians of Peace.
A U.S. official said Wednesday that federal investigators have now connected the Sony hacking to North Korea and may make an announcement in the near future. The official spoke on condition of anonymity because the official was not authorized to openly discuss an ongoing criminal case.
Sony said it was cancelling "The Interview" release "in light of the decision by the majority of our exhibitors not to show the film." The studio said it respected and shared in the exhibitors' concerns.
"We are deeply saddened at this brazen effort to suppress the distribution of a movie, and in the process do damage to our company, our employees, and the American public," read the statement. "We stand by our filmmakers and their right to free expression and are extremely disappointed by this outcome."
Seemingly putting to rest any hope of a delayed theatrical release or a video-on-demand release Sony Pictures spokeswoman Jean Guerin later added: "Sony Pictures has no further release plans for the film."
Earlier Wednesday, Regal Cinemas, AMC Entertainment and Cinemark Theatres — the three top theatre chains in North America — announced that they were postponing any showings of "The Interview." The comedy, about a TV host (James Franco) and producer (Rogen) tasked by the CIA to assassinate North Korea's Kim Jong Un (played by Randall Park), has inflamed North Korea for parodying its leader.
Regal said in a statement that it was delaying "The Interview" ''due to wavering support of the film ... by Sony Pictures, as well as the ambiguous nature of any real or perceived security threats." AMC noted "the overall confusion and uncertainty" surrounding the film.
Sony had offered theatres the option of bowing out, and when so many of them did (other chains to drop it included ArcLight Cinemas, Cineplex Entertainment and Carmike Cinemas), Sony was left with little choice.
On Tuesday, the hacking group threatened violence at "the very times and places" showing "The Interview." The Department of Homeland Security said Tuesday there was "no credible intelligence to indicate an active plot against movie theatres," but noted it was still analyzing messages from the group. The warning did prompt law enforcement in New York and Los Angeles to address measures to ramp up security.
In Washington, White House spokeswoman Bernadette Meehan said the U.S. government had no involvement in Sony's decision, adding that artists and entertainers have the right to produce and distribute whatever content they want in the U.S.
"We take very seriously any attempt to threaten or limit artists' freedom of speech or of expression," Meehan said.
President Barack Obama commented the hacking Wednesday in an interview with ABC News.
"The cyberattack is very serious," said Obama. "We're investigating and we're taking it seriously. We'll be vigilant. If we see something that we think is serious and credible then we'll alert the public. But for now, my recommendation would be that people go to the movies."
With a modest budget of about $40 million, "The Interview" was predicted to earn around $30 million in its opening weekend before Tuesday's threats. Sony also stands to lose tens of millions in marketing costs already incurred.
"This attack went to the heart and core of Sony's business — and succeeded," said Avivah Litan, a cybersecurity analyst at research firm Gartner. "We haven't seen any attack like this in the annals of U.S. breach history."
Sony was also under pressure from other studios. Christmas is one of the most important box-office weekends of the year, and the threats could have scared moviegoers away. Releases include Universal's "Unbroken," Paramount's "The Gambler," and Disney's "Into the Woods." Sony's musical "Annie," also expected to be a big earner, debuts Friday.
Doug Stone, president of film industry newsletter Box Office Analyst, had predicted that "The Interview" could have made $75 to $100 million. With Sony taking about 55 per cent of domestic revenues, that could mean a $41 to $55 million revenue loss, according to Stone.
Sony's announcement was met with widespread distress across Hollywood and by others watching the unfolding attack on Sony. A former senior national security official in the George W. Bush administration said the company made the wrong decision.
"When you are confronted with a bully the idea is not to cave but to punch him in the nose," Fran Townsend, Bush's homeland security adviser, said Wednesday during a previously scheduled appearance in Washington. "This is a horrible, I think, horrible precedent."
Eric Tucker and Darlene Superville in Washington; Lindsey Bahr in Los Angeles; and Mae Anderson in New York contributed to this report.