How are both of them to blame? Microsoft came to Platinum and asked them to develop a game with X budget within Y time frame, and Platinum agreed to those terms. For whatever reason, they could not deliver on the terms that Microsoft offered - even after being delayed. In what universe is Microsoft at fault? Why should they be obligated to pour more funds into a development situation that just isn't panning out. I like Platinum as much as the next guy, but Scalebound has looked rough since its inception - and the only reason people gave it a pass (myself included) - is due to Platinum's pedigree.
MS is at fault partly because there have been proof that their structure and demands don't always work well with third party developers (Lost Odyssey, TFLO etc.).