2008 happened, and pretty much every company that could, did cut as many "non-essential" jobs as possible to save money. MS probably saw the FSX dept as being expendable and cut as much as they could. When the economy made some recovery they probably figured it was safe to rehire and start another project. Given the recent release of the G940 and the Warthog they might have figured the genre is in a resurgance. Maybe they have been following the sales of 3rd part add-ons for FSX and figured "people are still buying this! Lets make another one so they feel compelled to upgrade their games. This will also probably take full advantage of DX 10/11 so that might mean a few more people dropping XP and moving to Vista/Win7.

I just hope they don't crap out another 1/2 assed combat flight sim in the next few years that will siphon money away from SOW.

I think MS didn't actually cancel FS when they shut down Aces as much as they figured they were spending way to much money going down that road. Now that the market is returning they believe they have a much more cost effective way to proceed with FS.

I watched the teaser ... and I'm still waiting for a flight sim that includes ground loops - voiceover talking about the Stearman takeoff, "See how easy that was? " after virtually no rudder action on takeoff roll - Even a locking tailwheel won't stop a groundloop - lol.