Its not just cause a game got cancelled. They ousted their leaders and talent, the studio became a very dei oriented one and then had a game cancelled (originally the beginnings of days gone 2), then they were put on support for naughty dog because Sony felt new bend wasnt up to the task, which that game also got cancelled then finally their "we're a hot young team now, this our first game" also got cancelled.
Its a completely different studio with no projects under its belt now.
And it was entirely Sony's fault, they should of never ousted Garvin and Ross and should of absolutely greenlit a co-op Days Gone 2 which was the original plan.
The creative director got fired/forced to leave the company, and the DG game director left because according to him didn't want to spend again 5-7 years in a row working in a single game because he will retire in a few years, so prefered to work in 2-3 shorter games instead (he went to Netherrealm). That's all, they can be easily replaced with either internal or external talent.
According to both of them, doing support for ND between projects (in this case between completing their original work on Days Gone and the start of the full production of the now cancelled new IP, which is what they did and not after the new IP was cancelled) is something they always did since the PS1 days, in the same way Naughty Dog also does support for them between project when needed. It had nothing to do with Days Gone, the new IP or these two guys leaving, it's something they do to keep a lot of people busy doing something since they complete their job in an internal project until their next internal project is ready to put them there.
According to both, Sony always has been very supporting with them even during the Days Gone reviews and early sales. Sony did approve the first project Bend pitched to them after Days Gone, which was the now cancelled new IP. Proving Sony was happy with Days Gone, also approved DLC, a PC port, a remaster and a movie adaptation.
Days Gone 2 never started because Bend decided to don't even pitch it to Sony. So its production never started because internal Bend heads wanted to make the new IP instead.
And no, having lost a couple people out of the over 150 that they are doesn't make them "a completely new studio" at all. Many people joins and leaves each AAA gamedev all the time, having removed 2 of them doesn't mean a big change because the other almost 1700 people who worked in the game (only around 10% from Bend) are also important and most of them will be there for their post-Days Gone projects.
Huh? Dreams was released in 2020, they only have 100 employees and their budget for each game is tiny, they don't need massive sales.
They are a small team with a majority of the staff being juniors and interns or people that was hired as that. So it's a very cheap studio to run. And Dreams, like their previous games was profitable according to them, and won many awards.
So yes, make sure Sony is happy with them and did it in sales/revenue minimum just ok. If not, wouldn't have allowed them to spend 3 years adding post launch content and wouldn't have greenlighted their next game.
Media Molecule also reported in publicly available documents for the UK governement their studio specific detailed revenue and profit since they started until after releasing Dreams, and all the years were profitable, which means Dreams was profitable.