Because Evolution Studios was redundant for Sony. Polyphony is already a big costly studio (though, I'd assume profitable) and makes the #1 popular car racer game. The car racer genre simply is not that big. Doesn't sound like money well spent for Sony to keep 2 first party studios in the car racer genre.

Sony took in Kojima who I'd assume is a big money spender and will release his first game slowly.

Microsoft's XB1 is selling like crap. They have obviously realigned their strategy. They are either going to stop pumping money into first party games altogether; or they have given up pumping money into bringing a diversity of first party games. Instead, they will focus on delivering in their big franchises such as Halo/Gears/Forza.

I thought the above was pretty obvious....

Finally an easy question.
The answer is MONEY.

It makes sense to close a studio that's not producing sellers or that's been having issues in developing their games and maybe use the staff of the old studio to bolster other studios. MS really shouldn't be closing any 1st party studios because it severely lacks 'em compared to Sony and Nintendo.

These companies are in the business of making money, not bleeding money. Apparently the losses from Driveclub couldn't be balanced out in sales. And MS invested 75 million and rising in Fable legends before it seemed like they started getting cold feet on their games-as-a-service projects. I'm sure these companies stuck with these studios as long as they could. If anything, MS seems to have a little less patience with certain projects of theirs not panning out, because they're used to their profits being so high. Anything that's ailing is going to get their attention quick *coughNOKIAcough*.

I will have to give Microsoft a pass on this scenario.

PlayStation is getting a ton of RPGs this year and XBox needed something to compete in this genre.

Instead of providing XBox with a definitive RPG, LionHead created an abomination of online multiplayer arena.

Honestly, I don't know if the game was going to be good or bad at the end, but its clearly NOT what Microsoft asked for.

In the other hand, Evolution Studios gave Sony everything they asked and more. Yes, the game was not ready at launch, but Evolution was a relatively small Studio, that could have used this rough experience to build something even better in the future.

To wrap-up, Sony lost more than Microsoft did in this situation.

Sure, but they dont HAVE to make a new car racing game. They can make whatever sony wanted them to do. Their skill in terms of graphical quality was extremly impressive.

They could even use Evolution Studios to remake old Playstation 1-2 games (what they did with R&C).

Nintendos first party studios didnt make same genre games each times either (Retro studios did metroid prime, helped with mario kart 7, donkey donkg TF).

There is so much potential what they could do and the Ps4 is selling good enough to make those games a success, even as exclusives.

Fable was one of their biggest franchises.

Some sale comparisons (latests 360 game in the franchise):

Halo 4: 9,7 Mio

Gears of War 3: 6.2 Mio

Fable 3: 5,12 Mio (+ PC Version sales)

Forza 4: 4,6 Mio

I heard Lionhead wanted to do fable 4 (victorian london setting) but microsoft "forced" them to do a cheaper spin off game.

We dont know how this game would be if finished. Look at games like league of legends, they are extremly succesfull and maybe Fable Legends (as a kind of a complete new genre/game as well) could had been something similar.

I think what it comes down to is working with 3rd parties is cheaper.

Frankly, there are 3rd parties out there that can do something great with any Sony or MS IP.

Nintendo massively dominates when it comes to 1st party sales, and people know this. If Nintendo would put out a device that the 3rd party companies liked, they would wipe the floor globally.

Whose going to buy a ps4 or a xboxone for the few 1st party games they have if ALL of the third party games come to the Nintendo device as well (in a NON inferior form like we have had with the Wii/Wii U and 3ds)?

Don't get me wrong, I enjoyed Halo for many years, but games owned and made by Microsoft/Sony have absolutely nothing on the quanitity and quality of Nintendo made games, and I owned a 360.

I do my 3rd party gaming on PC, because it is generally far superior on PC than it is on consoles, but if I could play those games on a Nintendo device without it feeling terrible I honestly doubt I'd get on the PC that much.

in nov. 2012-2013 most third party games came to wii u, ps3 and xbox 360, with the wii u version often beeing the graphically best.

Almost nobody bought the third party games like call of duty black ops 2, fifa 13, need for speed most wanted, assassins creed 3, tekken tag tournament and co for the wii u.

And even in that year, both ps3 and x360 outsold the wii u (and both had their succcessor in the pipeline).