Microsoft has been serious recently about reforming their studios and the quality of their games. If they have the option for a custom engine route I could see them taking it just to maximize whatever they can get out of the Xbone. Microsoft just has much more to gain out of hiring the core staff at KojiPro compared to Sony who have the excellent ICE teams working everywhere.
He might do a limited publishing deal with either Microsoft or Sony similar to Respawn/EA or Bungie/Activision.
If the existing XB1 titles are any indication, FOX Engine *is* not the answer MS is looking for.