Even if I believe that MS has way to few exclusives, I also tend to agree with your sentiment. They had a couple of high profile cancelations during this gen (Fable and Scalebound comes to my mind) but pretty much every one of them screemed mediocrity and bomb.

"recovered", they survive as a smaller company after what Microsoft did to them. They make indie budget sized games now. They used to work on big games like KOTOR II, Fallout New Vegas etc

No kidding.  Team Mattrick cancelled this game from a proven RPG developer but gave the greenlight to Fighter Within, Crimson Dragon, PowerStar Golf, LycoCycle, and Ryse.  Meanwhile, Obsidian moved forward to release a game that was successful on all fronts.  

We certainly can't say they made great decisions, lol.

Well stormlands lookedlike to be in the same group of games like Pillars of eternity.

It is a challenge knowing which projects to back and how long and how expensive they can get before hard decisions have to be made. Sometimes a game is worth it and sometimes a developer is poor at time or money management. The challenge I see is if you don't have many projects lined up any cancellation leaves major hole in a line up.

This is why in part I favor companies not announcing games too early. Feel confident it is going to happen before getting people invested and excited in a game.

In general, I agree.  But Microsoft needs more quality 1st and 2nd party titles to legitly compete with PS4 now and then Switch soon.

I will say that this opinion is false.  I have never heard MS being short on the money.  If anything they are hard on meeting agreed upon milestones.  If a project shows that it cannot maintain budget and also show their project in the right state for each Milestone, then MS is quick to kill the project unless the developer has good reason for the delays.  I will say this is more on point with how software companies work more than game software companies but MS is a software company first.  I believe MS has gone through enough games to see if projects cannot meet their milestones and the state of the project is way behind, making your money on such a project is slim to none.  Also releasing unfinished games or releasing games that turn out a mess is way worst then losing your money you invested sofar in the project.

It's fact not opinion. Again how many times must I point out MS has been doing this all this gen. Let's start with Phantom Dust. MS told Darkside they want a single player game with a huge aspect of Multiplayer on 5 million dollars. Darkside said they cannot do this on that budget. MS said tough make it work. Darkside tried and again told them won't work on 5 million dollars. MS said Fuck you it's cancelled and shut down the studio. Same thing with Scalebound MS wanted this huge multiplayer aspect that began as a single player Wii title. Platinum could not properly get it working and MS would not help them so they said fuck you it's cancelled. MS has a habbit of this. They give a list of demands and want everything but don't give the proper budget time or management.

I am going to give you a hint why Darkside failed.  First and foremost in the software contract game anything that is asked of you by the customer outside of the original scope of the project is considered a change order.  The only way that MS could tell Darkside that they must include additional stuff without Darkside coming back to MS and giving them a price on how much it would cost for the addition would be a major fail on their business end.  The reason for this is that contracts usually state explicitly exactly what the vendor will do and any additions usually will result in a change order to the project for additional fees.  Its very hard for me to believe that Darkside would just sign an open contract that allow the customer to change up the scope anytime they please.  

I read the Kotaku article and working as a software developer that article does not add up.  There is no way management would just say "OK MS, we will add a single player to the original scope and we eat the additional cost".  Before Darkside would do any additional work on this single player component, they would have hashed out a changed order with MS, have them sign it before any work would be done.  If not then it would be incredibly stupid to do the work knowing it would result in additional cost and expenses to your business.  Reading that article sounds absolutely crazy because if MS actually did ask for all these additions, that should have been a boom for Darkside not the other way around.  They should have been quoting to MS all types of additional prices for each new component they ask for and if MS stated they would not sign a change order for those additions, it would have been an easy no.  Darkside would cut their loses with the work they did and charge MS for that work done.  

So here is my thing, you can blame both parties on this one.  I would even believe you can say that Darkside was very naive giving how much additional staff, resources and manpower they gambled on when it was very clear they did not have the balls to get MS to sign for that additional stuff early in the project.  This is a clear sign of mismanagement.  Customers will always change the scope if you do not push back and hold true to your contract.  This is the sole reason you do contracts because it protects both parties.  The fact that Darkside waited until after they hired all those people, did all that work found out they came up short and then went to MS for the money is complete bonkers.

As for Scalebound, I do not have enough info on what went down on that project to form a solid opinion just yet.