MS closed Aces which made Flight Sim and other Sim games for PC.   Add to this closing Ensemble, FASA, releasing Bungie...  It's like MS has decided they don't need internal game development.  Could Lionhead and Rare be closed or sold off next?

http://pc.ign.com/articles/947/947737p1.html

"Approximately 5,000 Microsoft employees will be laid off; around 1,400 were cut immediately, with the remainder to but cut over the next 18 months."

Looks like these are the cuts they were referring to. Not much effect on xbox if you think about it.

not in trouble right now, but if they lose more 1st parties then its a problem. 3rd parties arent going for exclusivity anymore.

Well how well are the Flight games selling? I know back in the days Flight Sims were a premiere genre on th PC, but haven't they lost their luster these last 10 years?

Anyways, maybe it's cheaper to buy exclusives second party and retaining the IPs(or not) than it is to invest in studios. Or maybe this will all blow up in their face. It's impossible to tell at this point.

Says who? 

Apart from Halo, have first-party games pushed hardware anywhere near as much as Sony's or Nintendo's franchises have? Even if all first-party development was suspended, the impact wouldn't be that much.

It's not like MS uses the in-house nature of the projects to its advantage: the games would be the same if developed by a third-party.

He's thinking of independent third parties that keep taking their exclusives and making them multiplat. What he doesn't realize is we're talking about games like Resistance, Ratchet and Clank, Motorstorm, Heavenly Sword, and Lair that were created by studios Sony doesn't own but made IPs they can't bring elsewhere.

Disturbing trend. Wish they'd bought Bioware but not at that price. Sounds like they are not happy about the rumors of ME2 going multi. Finally turned a profit in 08 though and that has to be the priority. Cut back and hopefully show some black during the recession.

Its a know fact that the PS3's biggest strength is its first party studio's.. so I really don't understand what MS's strategy is...

I wasn't aware Microsoft Flight Simulators were even still being developed. Should have closed this studio before Ensemble, IMO.