In a statement, Epic Games says:
Epic Games has reached an agreement to sell the 'Gears of War' intellectual property rights to Microsoft. We're very proud of the franchise we built in close partnership with Microsoft over the past decade and are happy that this agreement enables Microsoft to forge ahead with the 'Gears' universe on their industry-leading platforms as Epic concentrates its efforts on new projects. Epic remains totally dedicated to supporting Xbox One and is licensing the Unreal Engine 4 technology to Microsoft in support of their future projects.
Learn more about Microsoft's acquisition here.