Some people say it's because of differences with Steve Ballmer. Also the surreptitious cancellation of Courier. Apparently he will be on sabbatical and unlikely to return. He was the creator of Zune HD platform last year and worked originally on the Xbox 360.
I am wondering if it has something to do with the three red lights story after the launch of the 360. Besides that, I don't know if he is a key guy or not behind innovations like Natal. It looks like he wasn't very involved in the project in comparison to Zune, for instance.
http://www.eurogamer.net/articles/j-allard-no-longer-at-ms-says-report
Rumours are swirling that J Allard, best-known for his involvement in the development of Xbox, has left Microsoft.
ZD Net's Mary-Jo Foley quotes a "pretty reliable tipster" as saying Allard is currently on sabbatical and probably won't return to the company.
Allard is said to have been working on the Courier, a dual-screen tablet prototype. Apparently he was unhappy when the project was canned. Some sources say he's leaving of his own accord, others that bossman Steve Ballmer is giving him the boot.
However, he is still listed as chief experience officer and chief technology officer for the Entertainment and Devices Division on Microsoft's website.
Microsoft has declined to comment on the report.