Insomniac didn't walk out on him. They were only entitled to making three games.
True, but then THEY WALKED OUT ON HIM! By the way, I have been doing research on Spyro for the the LOA films. So I am not some stupid hick who doesn't know much about the franchise. The reasoning was because they thought they could do nothing else with him. In other words, they believed that they had taken him as far as they could storywise. Then there was the fact that they just probably wanted to move on to other ideas they had.