Microsoft has confirmed that it's closed it's Vancouver studio which was focused on a AAA Kinect Shooter, and was also responsible for the Free-to-play game, Microsoft Flight. All of the employees were laid off.
I enjoyed Flight, I really did, but there just wasn't enough there and I don't think the team was big enough to give people what they wanted.
If you've played Flight Simulator X, you know Flight had some pretty big shoes to fill. I certainly realize they were going for something different, more concentrated and focused missions, but the free-to-play model and trickling out DLC seems like a bad choice for the spiritual successor to a game that let you fly around the world out of the box.