They failed miserably on the PS3. Also they lost lots of developers right after Lair's release in the USA (I have 2 friends that worked on Lair and they both left, they were not the only one's though).
Now they are back to Nintendo and I really think it's the best thing they can do. They clearly are no Insomniac or Naughty Dog and most likely Sony pulled the financing on them. I know that they had a contract with Sony for another game, a PSN game, not sure if it will ever be released or not since my internal contacts are both gone from Factor 5.
One thing I know, I'm not sad to see them leave Sony for Nintendo. They did great things in the past (since the Amiga times) but for the past few years they lost it. Also their control ideas are more in line with Nintendo Wii and it's user base.
I hope they get their sh*t together and please Wii users.
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