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They made the mistake of not wanting to risk more money on the game without owning the ip. Cant really blame them, they would be taking all the risk for an ip that could very well go to another publisher in the future.

In retrospect, they should have put up the money needed to complete development. I dont think they are kicking themselves too hard though. Microsoft essentially took all the risk in the deal and EA is getting a big chunk of the profit. Now that the ip is established, they can go all on in the sequels and really push for some serious profit without having to worry too much about risk.