bear with us… i am busy with this for 4 hours now…tried everything…no luck
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So locking these files didn’t help, as @PlumLotus41962 wrote couple of posts above. MSFS is simply creating new config files when these already present are unreachable… So no workaround there and we should just wait until MS / ASOBO fixes this…
My candidate theory is that there is some problem (caused by the newest version of Gaming Services) that avoids MSFS download actual setting files from player’s cloud storage and MSFS detects it (wrongly) as there is no configuration (despite there is one on local disk cache already), so it forces create a new one during sim startup…
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At least controller config profiles are still there… just lost all my VR graphics settings, hopefully will remember my dialled in settings 
i think you are right, the settings must be stored somewhere in the cloud…i searched whole MSFS root and couldn’t find any settings file where for example the sounds settings are stored (that annoying UI music).
Seems that recent Gaming Services update seriously broke player’s profile cloud - client synchronisation and we are unable to get our settings / download our purchased content…
These settings are stored in files located within this folder c:\Users\Steve\AppData\Local\Packages\Microsoft.FlightSimulator_8wekyb3d8bbwe\SystemAppData\wgs\
Some of them are human readable (XML files with controller settings) and some are stored in binary form (sound, realism and other settings).
Exact same error here.
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The most sad think here is that we already know the root cause and possible solutions, but we are unable to deliver this / quickly consult this directly with MS / ASOBO (ZenDesk is really not the way in this showstopper cases), so it will take them probably days to fix this.
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Being that this unfortunately happened on a weekend means we likely won’t see a fix till sometime during the week.
BTW, wasn’t it a Gaming Services update that prevented MSFS from loading a month or so back?
(I remember it happening on a weekend as well…)
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I have Steam version, however no folders as above on my PC.
I wonder why the folder structure must be so complex 
This one was found on my PC.
I accepted the challenge, started the Steam version of the sim, no issue with settings. No idea which version of Game Services I have.
yes …this is the second time…
Seeing this as well, already have a case open with zendesk and they’ve had me try a ton of things with no success. The gaming services update makes sense. I’ll like this thread to my case. Hopefully they figure it out, resetting each time is getting annoying.
Things are getting worse…starting MSFS brings me to the Microsoft Store gameservices page (wich is already updated) and MSFS won’t startup at all now…
Try to manually restart both of Gaming Services windows services. You usually get this behaviour when Gaming Services are not installed or not running (can’t run).
Unfortunatelly it’s not. Just an XBOX app. Not cloud gaming services…
can you explain how to restart them both?
I have the exact same problem. Every time I start the sim all options are reset to default, nothing is saved. Please MS fix this.
OK, please show final version of Gaming Services after your update.