At first there were reports that Microsoft had closed its Vancouver-based studio. A Facebook page dedicated to the developer said that the entire staff of thirty-five had been laid off, and was confirmed by former employee Tara Mustapha on Twitter, linking to a picture of the MGS staff. Several other former employees, including one called MiaJerri, also took to Twitter to confirm the news.
"Now I can add 'casualty of the Vancouver games industry' to my list of achievements," MiaJerri said.
But later Microsoft confirmed that the actual studio had not closed, but that development of Microsoft Flight and Project Columbia, a Kinect interactive TV project designed for children, had been discontinued. The company assured the press that the Vancouver studio still has "more projects and development in the pipeline."
"Microsoft Studios is always evaluating its portfolio of products to determine what is best for gamers, families and the company, and this decision was the result of the natural ebb and flow of our portfolio management," Microsoft stated. "Many factors were considered in the difficult decision to stop development on 'Microsoft Flight' and 'Project Columbia,' but we feel it will help us better align with our long-term goals and development plans."
For Microsoft Flight, the company said that it will continue to support the community, and will continue to offer the sim as a free download here (opens in new tab).
Microsoft launched its flight simulator -- the first since 2006's Flight Simulator X -- back in February 2012 after announcing development in 2010. It arrived as a free-to-play title with a limited number of planes and a sliver of air space over Hawaii. Additional content was sold as DLC through Games For Windows Live Marketplace including the $19.99 "Hawaiian Adventure" pack (the rest of the Hawaiian Islands, Van's Aircraft RV-6) and the $7.99 North American P-51 Mustang aircraft (external view only).
Currently there's no formal announcement of the discontinuation on the Microsoft Flight webpage. It's presumed that Microsoft did not receive enough revenue to sustain development of the flight sim, and decided to cancel the project altogether. The discontinuation follows the closure of the ACES Game Studio back in 2009 which brought the original Microsoft Flight Simulator franchise to a close.