There was a glut of money put into the sedentary leisure industry, money that's apparently running out, so a lot of castles in the sky are now being axed. What 'aligned...expanding or engaging our audience in new ways' means I would bet is live-service games.
Live service games cost an enormous amount to build and maintain and also fail all the time. It's a very risky business model to go in. It's also not entirely that logical for Wizards of the Coast to bet all in with GAAS. Given Baldur's Gate 3 completely shattered sales figures and is a largely singleplayer rpg.
I think it's more likely Hidden Path's game wasn't that far into development and it was just easier to cut it when Hasbro started laying off staff and killing projects. Especially with the rumors that Hasbro wanted to full on sell the IP outright.
People have already been speculating that DnD One will be mostly virtual and subscription based ( even if only voluntarily)
If I had to guess One D&D being constantly delayed is a big part of them cutting Hidden Path's game as well. Like I said earlier GAAS titles cost an enormous amount and I suspect they probably regret greenlighting it. As the money is starting to run out and it's now a huge risk. It was a logical project to greenlight in an era where everyone was looking for alternatives to playing Dungeons and Dragons together irl. But now those problems don't exist and it's solely appealing to people who don't want to meet irl. And the jury's still out if that's going to be popular enough to sustain itself.
