By shutting down a studio instead of selling it off or even letting it buy itself out, Microsoft ensures that no studio it has ever owned can become viable competition. Who cares about a diverse industry when you can keep all the IPs developed under your umbrella and shelve them for decades, instead of letting the studios that made them go on to work on their creative visions?

Article also mentions that it breaks the employees of those studios up so there is less chance of a competitor that makes another successful IP