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Unsure if it was the same with Spyro but Naughty Dog left Crash cause they only had a contract to make four games. They were forced to move on and they also thought Crash was going into good hands.
lol.
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Insomniac made the decision to leave Universal, their publisher, behind, but they were forced to leave Spyro behind as Universal owned the rights.
I think that was a conscious decision to leave Spyro behind, though – they left Universal
after Spyro 3 (which contains a very definite “thanks for playing Spyro, peace out” message in the ending) was released; and Ted Price has stated in the past that they left the series because they felt the character was too limited, what with not having any hands.