According to this article from Jason Schreier, the reason is actually more cynical and awful than I thought, but in a different way. It actually has nothing at all to do with the specific studios or their recent output.
Basically, it goes like this:
- Microsoft gets a lot of press and legal heat around the acquisition of Activision-Blizzard last year
- This brings more scrutiny to the games division from the Microsoft higher ups ("what the heck are they up to over there, spending all this money, drawing so much attention?")
- The executives of the games division feel the need to Do Something™ to assuage doubts about the viability of their strategy and keep their jobs/autonomy
- So, who is asking for money in games right now?
- Oh, it's these two studios who are trying to spin up new projects
- Let's just shut 'em down instead, that should satisfy our bosses
- Now it looks like we're running a nice, lean operation!
So we get hundreds out of work, and Microsoft can continue its bad "netflix of games" strategy that isn't even working. Everything else is just a lame excuse.
Just pure corporate politicking. Nothing more, nothing less.
