Wasn't a new game planned?

Canceled.  This is the consolation prize.

Wow, thats fucking sad. Thats no consolation.

 My guess is microsoft caught wind of the buzz onthe net that nobody wanted this and gave it away for free. Either that or they are going to probably show something at E3.

I think they also took note of the growing discontent with how much previously announced stuff was disappearing: Scalebound canceled, Fable Legends canceled, Spark being DOA, I think they just didn't want to add to that and this was a way to in a very technical way still bring Phantom Dust and avoid mentioning cancelation again.  Cause we didn't know the Phantom Dust coming to Xbone was THIS one until what?  A couple weeks before launch?  It was a smoke screen.  

Microsoft can only create a smokescreen with their fanboys. People focused on games will always know Microsofts greatest flaw....which is making exclusives. Great everything else though. Again, that just goes without saying. I am actually going to make a post about something I love about them right now.

I wouldn't say *everything* else is great.  Their wester third party relationships are strong, their Japanese third party relationships are barely present outside the handful of obvious ones.  Also, the 360 gained it's massive appeal because of  MS's efforts to diversify and shore up its exclusive offerings early on.  It began to decline after MS stopped doing that.  

And the smoke screen worked pretty well.  They kept promising PD and then just did so less frequently until everything quieted down and then released this so they can move on.  Most people won't even realize what happened until a while later.  Your forum goers will but that's a small group.  They did this as a measure to stop the bleeding though, the Xbox brand's perceived value has been in decline for a while due to MS's own tactics and mistakes, they couldn't afford to publicly cancel ANOTHER game after just canceling Scalebound.  It's not that PD is a big seller, it's the symbolic loss that's concerning.  

Well....in a generation where Sony is winning, have third party japanese companies ever really had a need to run to an outsider unless they were desperate? Microsofts smokescreen has worked ...but again only with people who are impressed by secondary things rather than primary things to a console. Its why fanboys have been gloating about the scorpio for five months straight with few great exclusives to show for their fanfare.

Well your fanboys don't need blinding.  It worked on the average consumer who just knows "hey, there's that Phantom Dust thing".  It keeps that game in their mental image of the Xbone even though it actually doesn't exist.  And small exclusives like these are again symbolic.  Sony learned this with the PS1 and PS2:  you aren't selling people the box or the individual games, you are selling them the platform, the ecosystem you are creating.  The PS2 had some awful 3rd party ports and was noticeably weaker but people bought into the Playstation platform because Sony built and promised a compelling ecosystem on Playstation.  MS knows this is important and that canceling games, closing studios, leaning too hard on 3rd parties, constantly having fire sales, all those create a mental assumption in the audience that your ecosystem isn't very vibrant or very desirable.  

And no, Japanese third parties don't have to run to MS.  But MS could have at least tried to build bridges.  They did with the 360 and it DID help.  But this time they just didn't.  At all.  

I doubt the average consumer knows what Phantom Dust is. The only stable message that Microsoft has sent to consumers is that they want to be everywhere, even if you dont game.

Microsoft building bridges in Japan depends on how well Microsoft sells in Japan. Once Microsoft sold over a million Xbox 360's in Japan then the Japanese devs started giving Microsoft games. No one in their right mind should give Microsoft an exclusive game (for an IP they own) in a generation were Sony is doing well. That will send those franchises to an early grave. I mean, look how everyone is looking at the switch. They are contemplating whether the switch gets ports orr exclusives. You have to give publishers the platform and have the following behind it to create the spark which drives their development dollars. Im sure Microsoft has tried to build bridges, but once Sony wins...its kind of over. I have a theory about Japan that if an outsider makes a product thats a carbon copy of their own its a recipe for disaster, but if they create something genuinely innovative (that they havent seen before)  or better in quality than what they make nationally they will come.

With that said, I really hope they get their act together. The only games im expecting from Microsoft that I even want are State of Decay 2 and Crackdown 3...and still wouldnt say those are must haves. Are you anticipating anything at E3 that you're excited for?