Which kind of tells us what happened to The Last Guardian.  Everyone was working on their own game rather than working together.  There was no structure for a large-scale project.  I remember reading that "Team Ico" was really just Fumito Ueda and a few other people, which is nothing like what we think of as a team from a large western studio.

how is insomniac second party?

Let's go ahead and talk about this now because it's going to keep coming up otherwise: there is no such thing as "2nd party". It does not actually exist.

When people use the term correctly, it means "exclusive game developed by a third party studio" or it's used in reference to the studio itself. However, typing "2nd party" is a hell of a lot quicker than typing "exclusive game developed by a third party studio" or "third party studio that sometimes develops exclusives for one of the three console manufacturers" all the time. Just consider it short-hand and be glad.

Looking at Japan studios to pick it up this gen!

sounds perfect.

This thread further confirmed that Insomniac are a bunch of morons. They spent their entire life doing games only on Playstation, 100% of their fanbase is on Sony's console, they sold a lot of games on PS1/2/3.

And then they make an exclusive Xbox game, at a time when the Xbox is FAR behind the PS.

Fucking genious.

Still, during the PS3 era, not once did they went to the 360. And during the PS3's early years, they had every reason to do so. Resistance could have been an Xbox exclusive, for example.

Apparently, their reason was because Sony wanted to keep the Sunset Overdrive IP, like they did with R&C and Resistance. So they went to MS instead.

Well, fantastic, they now have their own ip. What's the next step? Probably put it on the PS4. Was it worth it then? Nope.

Seems to me they had a hard look at their future direction , weighing up the pros and cons , the pros , being continue with Sony and have the safety net of steady work and nice profits and the biggest risk that of  making a new IP is underwritten .

The cons ,  For the financial risk of a new IP Sony takes ownership , so  you don't get fully rewarded if it becomes a success , also like what happened with Resistance you can be asked to make a game to order , luckly they had done  a fps in the past and welcomed the return to that genre , next you can end up being more of a production line than a true studio .

It looks to me like the direction they end up going  ,was to be a multi platform  studio  ,with their own IPs  being successful enough to at least break even and eventualy making enough money to self finance, but Fuse put paid to that ,  so it was go back to Sony and look like you can't make it on your own , or in their case leverage their rep as Sony's top 2nd party , knowing MS would see it as a win on both the gaming and marketing sides and they continue to do like they had allways done but this time it's MS , with the bonus of keeping the IP.

2nd party blurs the line between 1st and 3rd, yet it's still distinguished. So I think there's still a relevent meaning to the term.

1st Party Studio - Owned/Created by Platform Holder (Sony, Nintendo, MS, Valve-->Naughty Dog, Retro, 343)

2nd Party Studio - Not owned by Platform Holder, but makes titles only available on one platform (Quantic Dream, Ready At Dawn, thatgamecompany, Gamefreak)

3rd Party Studio - Makes multiplatform games, but can be contracted to make a new IP for a platform (Gears of War, Deep Down, Metal Gear Solid 4, ZombiU)

I personally see 2nd party as "close partners" to the console manufacturers. As in, you associate that studio with one of the consoles.
Ready at Dawn, Quantic Dream, Bungie/Insomniac (both formerly), Game Freak...

All of them have made games for other consoles (including Game Freak, yes), but you just think of them as being "exclusive to that one console".