It's like destroying a factory when the chips it produces do not sell.

But Hi-Fi Rush did well and invigorated the market. Starfield cost an order of magnitude more and only had the opposite effect. It's like shutting down your successful competitor for your screwup because you're their boss. Almost like the result of an anticompetitive practice.

Mortal Kombat and FIFA sell less but general more profit. Profit margins

With Tango/Hi-Fi Rush, MS decided to make it free with Game Pass at launch, which obviously hurt its sales.

If you sell chips but charge people $1 for two weeks for unlimited chips, then just $10/mo for unlimited chips, you might be disappointed with direct chip sales.

Firing an entire sports team after a loss. Although in Tango's case, not even a loss, just not a big enough victory.

Game studios have always been very brutal in their hire/grind/fire cycle. Not sure they really want to change.

Most game studios don't give 2 shits about the games themselves, it's all about the MTX. They don't care if selling the game installer is a massive money loss, it's about bringing in the microtransactions and the massive piles of cash they create (generally at the expense of the users game experience).