Not quite. Out of the six divisions that make-up Microsoft Game Studios, only Lionhead and Rare are acquisitions. The other four are original first parties created by Microsoft. All six are 100% owned by Microsoft.
This has nothing to do with sales. I remember reading 7 out of 10 MGS games fail to sell over a million. It hasn't stopped them producing more titles.
Although you do raise a valid point. Nintendo is selling the most by far, so why are they not investing more in "hardcore" games? They've got the biggest market share, surely they'd sell more.
Remedy Entertainment, Bungie Studios, BioWare, Artoon, The Whole Experience, Epic Games, Ensemble Studios, Silicon Knights, Square Enix, Blueside, Screenlife, Mistwalker, Bizarre Creations, Q Entertainment, From Software, Capcom, Sega, iNiS, Team Ninja, K2, Hudson and Realtime Worlds.
I'm sure there are probably more.