Epic made a fantastic play here, no doubt about that. I think they were done with the franchise and wanted to move on. Being able to get value out of that situation is a fantastic business move.
Now, as far as Microsoft goes, we'll have to wait and see how the deal ends up for them.
1) Is the franchise really in decline? Do they have a creative plan to bring it back as good as new?
B) Is it worth the investment? We can't know that without knowing how much they paid. Even then, it's possible the move was made simply to bolster the Xbox One's position in the market, with Microsoft perfectly willing to accept a slight loss or a slight return.
The most likely scenario is that the next Gears will be a commercial success, though probably with somewhat of a decline. It will move a ton of units lifetime, though many will come over the course of the XO's life-cycle and at a reduced price (or even free). It's a win/win for both Microsoft and Epic, though I think Epic couldn't be happier with how this played out.
From a personal perspective, it's a win for me, as well. I wanted something new from Epic rather than the tail-end of Gears. I much, much, much prefer a new IP, especially since the first Gears games were unlikely to leave Microsoft.
