If people don’t buy your game, you don’t have money to pay people. Ideally, Surgent Studios would have developed their game inexpensively enough and with enough of a war chest that they wouldn’t have to lay people off after their first product didn’t sell enough copies, but that’s clearly not how they were funded. It sounds like the studio still exists, so maybe a smaller version of that team gets to take a crack at that second game, but you can’t pay people with money you don’t have, and we as the consumers have been well served by so many other games that it’s not much of a mystery why people didn’t turn up for this one.
How many releases is a very different number than how much profit. Only a few of Microsoft’s releases likely account for a sizable percentage of the entire industry’s profits in a given year. The fact is that investors saw dollar signs, and the industry expanded to a level that the market doesn’t actually sustain. How many metroidvanias do you want to play in a given year? And given that Animal Well and Prince of Persia: The Lost Crown came out this year, how likely are you to play Tales of Kenzera: Zau after you’ve bought and played those? Mass layoffs are not a good thing, but it’s a mathematical consequence of how much companies are permitted to expand relative to what people actually buy.
I know it’s not an option for consoles. Since the 7th gen, it was always moving in this direction. It’s probably one of dozens of reasons that PC overtook consoles in market share.
A friend of mine bought one at MSRP to add to his collection along with the likes of Anthem and Babylon’s Fall. He also picked up Suicide Squad for this reason, but he found that he unironically really enjoys that game while it’s still operational.