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It wouldn't be the first time something like this has happened. RE 4 was originally a GC exclusive, as was RE Zero.

If there's any truth to the rumor, it simply means MS made an offer to bankroll development of RE7 by offering incentives that would offset the loss of sales on PS4, which may have a significantly larger market share percentage by the time the game releases.

Make no mistake: the game would sell a lot more if it were also on the PS4, but given the sales performance of RE6, the franchise may well be in permanent decline and by accepting a deal from MS as a safety net against potentially below projection sales, said deal could keep the franchise limping along.