ThrowawayFS
Development stopped with the dissolution of ACES, the Flight Simulator team, but Lockheed acquired rights to continue to develop MS ESP, which eventually became Lockheed's Prepare3d [2].
[1] https://msdn.microsoft.com/en-us/library/cc526948.aspx
[2] https://en.wikipedia.org/wiki/Microsoft_Flight_Simulator#Clo...
From an external perspective, it seems most likely due to IEB's leadership at the time wanting to focus all their resources behind the upcoming Xbox One, in hopes they could replicate the success of the Xbox 360, and the misguided belief that PC gaming was dying out.
Neither of those bets worked out particularly well for them.
> Was the the Flight Sim team really that big of a drain on Microsoft's balance sheet?
Rumor has it that it consistently turned a small but not insignificant profit.