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http://www.neogaf.com/forum/showthread.php?p=242210907#post242210907
(Teeth is Tyler Moldenhauer, who did QA, digital painting, game testing and if remember right is the cousin of the creators).
We probably would have had a speck of a chance if another studio other than microsoft funded them.
I'm not really sure how much Microsoft funded them at all (can't find any good sources for it) or if they just promoted the game, especially since they mortgaged their homes to make the studio for the game, but the IP of Cuphead belongs to MDHR (as confirmed by Tyler Moldenhauer in the post I linked) and they can do what they want with it without Microsoft intervening.
If Microsoft did most of the funding it likely wouldn't be available for Windows 7 or Steam/Gog either, but Windows Store and Windows 10 exclusive, since that's been their focus the last few years. Remove support for Windows 7 in favour of Windows 10 and also putting PC games exclusively on their own store. They're also planning Mac/Linux ports, which Microsoft games never do.