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After they let bungie go I was wondering when this would happen, MS is moving the game division in the same direction as the rest of the company. Currently a large amount of the actual work done at the Microsoft campus is done under contract and it's worked very well for them, no worries about overtime, benefits and when people burn out they just don't renew your contract.

It makes a lot of sense, it will probably be cheaper in the long run to contract out exclusives with guarantees to sequel exclusivity then to continually fund internal studios with poor performance records like rare.