I never like to hear news about any gaming company closing down. But technically the way listed companies are structured its not shareholders who make the decisions about who gets fired, retrenched or a company within the main business gets restructured\shutdown
Its the board who decides this and its normally about the overall sustainability and profitability of the business unit. Microsoft would have millions of different shareholders and almost all shareholders have an expectation of a positive return on the share price which is understandable. No one would buy shares if they didnt increase in value because whats the point if they dont ?
And the board of every company manages the shareholder relationship which means they have to ensure that every business unit performs and makes its target
Its not unreasonable this type of structure and relationship and Redfall was a bad game. So the main difference between a small development company making a bad game and that same company being part of the larger company like Microsoft is there less appetite for making a bad game because you are expected to deliver on results in the latter example
But I also imagine the board would have to consider reputational damage, so you dont just shutdown iconic and prestigious studios like Obsidian or Bethesda over one bad game or one initially badly received game
They would balance these things