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I can't help but think MS is getting totally out of 1st party software and instead going to contract studios to make exclusives. It's a tight way to run, as you contract 20 studios one year (launch year for a console), then scale back as 3rd parties move in and even drop down to a handful if times are rough and you don't want the overhead.

My bet is Lionhead, Forza's team and Rare are still working on some things and when they are done those projects, they are done as MS 1st party studios.