Sure but nobody liked Redfall, Ghostwire was a mid game, and Hi-Fi rush was a low budget release not a huge money maker, so why would Microsoft keep these studios around? Microsoft is trimming the fat of redundant studios which makes sense business-wise, but the problem is that they aren't going to do anything about their other problem areas.
Microsoft forced Arkane Austin to make Redfall into a live service loot shooter, something the studio never made before and wasn't in their wheelhouse. They're known for immersive sims like Dishonored and Prey and instead of letting them continue to make stuff like that Microsoft just couldn't wait to make every single game a "live service" and fucked it all up. The studio is getting axed because of Microsoft's poor management.
Hi-Fi Rush wasn't a huge moneymaker, but it did make money. They didn't lose money on Hi-Fi Rush, they made a profit. Especially considering the small budget it would be nothing for Microsoft to keep investing in these kinds of AA games, especially since Hi-Fi Rush became a prestige title for them and earned them some good will from the gaming community. The game won a couple of awards, and Microsoft had stated that it was a success in "all key metrics."
"We couldn't be happier with what the team at Tango Gameworks delivered with this surprise release"
www.gamesradar.com
Really though, Microsoft doesn't have fat to trim as it were. They have all these studios and have barely produced any games this entire console generation, and the ones that they made were pretty forgettable.
Halo Infinite was completely mishandled. Starfield was pretty boring and has been mostly abandoned by the mod community (which is saying something for a Bethesda title). Redfall was one of the worst reviewed games of all time. When was the last time you even heard someone talking about a new Gears of War release? Hi-Fi Rush was one of the few Microsoft produced games that was worth anything.