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S.T.A.G.E. said:

They should've stayed with Sony. 


To be fair, the position they were in after HS was bleak.  Sure, make another title, but there was no guarantee that PS3 was going to take off in sales like it did and they may have just ended up developing another bomb that would net them no profit AGAIN.

Unfortunately, I do kinda think they made the wrong decision.  The title would probably have been releasing in 2009 around the same time as the price cut.  Given the fact that they would have been more used to the PS3 tech by then too, then we could possibly have seen an Uncharted 2 style improvement in quality if they were indeed going to make HS 2.  And maybe it would've had a sales boost from people waiting for God of War 3, too.

But no matter, it is what it is.  At the time they made the decision which was most likely to pay off for them.