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To me it means, Rare has been under performing for a while now, and Sports Rivals was the last time.

Laying of 16 people isn't a big thing at the end of a project, but these were all high level staff, which points to MS restructuring the studio as a helper studio to come in and add resources to there other bigger more successful studios who need help meeting deadlines.

I would not be surprised if another Rare game is not announced for a very very long time.