Alright, i'll spell it out a little for folks.
So, the devs working on this weren't just in-house SIE/ND, but also contractors who would've been needed to bolster the asset delivery pipelines needed to maintain a big live-service operation. When hammering out SLAs for contractors on a live-service project like this, you typically set them on time-based service timelines, 6-12 months, with automatic extensions baked in. The thing is, the SLA cuts both ways - if you cancel the project, say, 6 months before the contracts have matured, then thats just lost money. So what you can opt to do is you keep the contractors around, have them working on assets that can be shared in the engine and resources that your studio needs, then when the SLA does mature, you can cancel the project, without opening yourself up to legal liability, or handing out money and getting nothing in return.
This is one of the things that happened here. Its why you're hearing about its cancellation now instead of 6 months ago.
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This is not at all what happened. This entire time, they have had 2 different SP titles in dev; their next main title (you can easily guess what it is) and a much smaller incubation team on something new.
SIE spent a lot of money and time since 2019 expanding their core dev teams, thanks to the tutelage on Insomniac, to turn them into multi-production teams. Almost all of their major studios now have multiple full production teams going. SSM has 2 and 1 smaller one, for example (Valhalla). Bend has 2, Sucker Punch has 2, ND had 2 + 1 smaller one as well, etc.. They talked openly about this for many years.
ND simply bit off more than they can chew here. They honestly believed they had a production pipeline that could support a live-service game for years all on their own, when they famously miss nearly all of their major publisher set milestones. There was no internal struggle - ND was super passionate about doing a live-service MP title.
This is not the last we have seen from MP modes at ND btw.
