I don't hate Fatal Inertia, I can't remember anybody else at the zone saying they hated it either.
It was just used as a example of a game that was similar to WO, but had failed to get sales.

I only ever played the single player demo when it was first released, it just never appealed to me.

I agree these guys should know how to make a great game.

I expect whatever their first game is it will be rather modest given the amount of staff they have.
Maybe something sort of similar to "Journey".
Although while surfing the web I did read somewhere that they [or at least some of what is now Firesprite] could of been among the several small independent studios asked to help sort out problems Sony have been having making "The Last Guardian", which was slated by Sony for a PS3 release early 2014.