It's Microcosm's fault!

[Louis Dias]

http://www.edge-online.com/magazine/the-making-of-wipeout

As an important launch title for the PlayStation in Europe there was no great wealth of experience to call upon for working on a 3D console game. Indeed, Sony’s interest in Psygnosis was primarily due to its technological experience, initially through work on CD titles such as Microcosm.

Well.  That explains how we lost Psygnosis...