A spokesperson for the company said: "Massive technology will be redeployed to our first party ad business, focusing initially on gaming and eventually expanding to other Microsoft opportunities."
"Central to this announcement is our decision to work closely with the Interactive Entertainment Business (IEB) at Microsoft to continue developing and expanding the Massive technology."
While Microsoft plans to "sunset the Massive brand name at year-end", the company pledged to continue developing and expanding the Massive technology to "meet the needs of our first-party gaming advertisers on owned and operated properties like Xbox LIVE and MSN Games".
The consolidation, according to the spokesperson: "represents a tremendous opportunity for Microsoft to further elevate Xbox LIVE advertising as the singular Microsoft in-game and around game advertising platform for advertisers."
This plan to integrate Massive's work with that of the IEB team appears to confirm speculation that the ad unit's work conflicted with that of Microsoft's Xbox Live team, which sells advertisements directly and doesn't share revenue with publishers.