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I'm a "the glass is half full" guy, I see this a perfect opportunity for these people to start their own sim / game. Just remember MS and the other fat cats like Sony/PS3 need huge operating capital just the survive from day to day. It makes sense to cut minor revenue streams that cost more to keep than the $$$ they bring in. On the other hand this leaves the door open for smaller Indie developers to pick up the niche market. Its a perfect opertunity as thier financial requirements are much much smaller, heck there are some that operate at no profit all and do it just for the fun of it, but later get picked by a devlopement studio, Splash Damange is one that springs to mind.

The simple truth is that big companies like MS are going back to core businesses, ACES was a "nice to have" studio, but when times are tough and money is short cuts like these will happen, its simple economics. But there are advantages to being / staying small.