Sounds like what happened to Scalebound as well.
Personally, I think MS is treating the gaming division way too "business-y". I understand that the gaming division ultimately has to make money and report to the share holders, so games that went over budget get cut.
But there is a art form or creative side to the gaming business that cannot be projected or budgeted right from the start of the project. We saw the successes of TLG and FFIV even after the extended development cycle.
Even if it both games were mediocre, fans do appreciate that the games were eventually made, and not cancelled midway through development. This feeds to the goodwill of the company, and fans are possibly more forgiving and willing to support their new projects.
Source
Tyranny is the reworked Stormlands
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