Actually the move was thought to do more with an agreement that Microsoft made with EA to get EA to invest in developing Xbox LIVE gaming.
XSN sports games were, generally, successful in that some were very popular with niche crowds. Top Spin for example. However, with EA and 2K locking up licensing deals, it was difficult to develop the games people were really interested in playing. So Microsoft sold of it's XSN assets to other companies and let them do what they will with them.
Microsoft was also already in the mood to let third party developers and publishers bring games to the system, rather than trying to fill all the niches themselves. So, with the inability to get licensing deals, the negotiations with EA to get them on Xbox LIVE, and a general desire to get more 3rd parties in on the action, Microsoft bowed out of that segment.
Microsoft didn't let Links go for the sake of it, it was a prized possession, and one that consistently made money for Microsoft. So good was the golfing game that no one could compete against it, and for some time no one did.
Oddly enough, as Microsoft titles, most of the XSN titles did well. However, as third party titles they failed to have anything but modest success.
