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Until they give a "better" reason, I am going to assume the one they hinted at is true, and Microsoft just decided that it was worthless because it wasn't "Mikami's studio" anymore. Honestly, I already suspected it.
In which case, fuck them. These games were not made by one person, a studio is bigger than its director. And the rest of them didn't get even one chance to prove themselves.
Truly shows how little they value the people who make their games.
i think it was just standard politics, everybody had to take a haircut, and nobody in leadership wanted to fight for that studio, it didn't have a patron/protector. It got killed because no executive was championing it, not because it was bad.
I'm surprised Aaron Greenberg didn't fight for it, since according to him their last game smashed every metric and exceeded all expectations.
While he did say those things, it doesn't mean anyone was willing to fight for it internally. This is why many external companies that do so well on the open market die and wither after they get acquired by big companies. Internal politics don't have to be rational externally.
It could be that its success was internally attributed to a different team someone in the hierarchy favoured.
This is what corporate speech control looks like, kids. Not even once.