Well yes, they bought them out because MS was getting into the gaming world and Digital Anvil was a good studio was some decent games under their belt. Well, I am not going to speculate on what the buyout deal entailed, it could also mean that CR was not interested in staying after the buyout or he wanted to do something else, he has been directing since the early 90's and enjoyed it a lot, he did go into the movie industry after that buy out. It's not something that is humiliating, a lot of the times when companies buy others out there will be some leadership changes.
Actually, Digital Anvil had one game under their belt. That was Starlancer, and it was mostly developed by Erin Roberts and Warthog Games. But Chris Roberts successfully pitched his ideas for Freelancer to Microsoft, which was why they signed up as a publisher for it. Later, they bought out DA when the studio would have otherwise gone under.
A quick timeline of events:
- 1997: development of Freelancer starts, originally scheduled to last three years.
- 1999: Microsoft announces Freelancer at Gamestock.
- 2000: with Digital Anvil having run out of funds, Microsoft agrees to buy the studio out. Chris Roberts leaves the company, as well as gaming, focusing on filmmaking entirely
- 2002: by October, beta testing of Freelancer begins.
- 2003: the game is released in March.