Will Microsoft cease to have 1st party games? Another internal studio closed.

[Lord N]

First and second party titles always bring in more money than third-party titles. One of the reasons that Nintendo did rather well financially during the N64 and Gamecube eras is because of its first party titles.

In an era where third-party titles are going the way of the dinosaur due to rising development costs and the fact that neither the 360 or PS3 have large enough install bases to merit mass exclusivity, it's very important to have prominent in-house titles. If games like Gears Of War started going multi-plat, then MS would be in serious trouble.