^I still think they should have been allowed to make the sequel for Hi-Fi Rush since the first one sold very well from what I've heard. Unfortunate that the rest of their games had more of a cult following and weren't really money makers though.
Also I don't think Microsoft is good at handling game studios in general, and they have a pretty long history of that from what I remember, so I'd say it's a layered situation, and regardless it still sucks that the studio closed