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Comment by tdicola | Hacker News Reader

The extra irony is cutting jobs and research while spending billions to buy a game franchise.

I don't see any irony. This tiny layoff (~2% of the workforce) is completely unrelated to a franchise purchase to drive growth in the entertainment division. Microsoft isn't hurting, it's reorganizing.

It makes MSFT look some combination of bad/inept/stupid in Silicon Valley. Its obviously not quantifiable in the MBA fashion, but especially in Silicon Valley MSFT needs as much of a good presence as it can get, I think.

I'm going to go out on a limb here and suggest that Microsoft is already considered bad/inept/stupid pretty universally in Silicon Valley, and that this doesn't change anything.

Of course they have to make this atmosphere, in order to shock young people not to go to MS.

However, there were a few Turing award winners in that lab.

That game franchise will generate more revenue and employ more people than the purchase price. It'll be a real cash cow.

Microsoft would have to sell 92,592,592 copies of minecraft to break even. So far, 16,730,534 have been sold.

That's just PC sales. In April this year XBox 360 sales reached 12M and PS3 sales were 1.5M.

That aside, the real money is in merchandising and tie-ups

Minecraft also makes more on merchandising sales than software sales.

Half the under-13s in the country have or will have a Minecraft t-shirt, lunchbox and/or action figure. The game revenue is a small part of it. If you have kids you probably know the mindshare this game has. It's bigger than any video game I remember.

It'd be interesting to see Microsoft make Minecraft a free addition to every licensed copy of Windows.

Mojang was bought with money that can't easily be repatriated. Same as Skype, which was purchased with dead money.

If rumors/leaks are true, the Skype investment was going to be rewarded by 3 letter agencies via contracts and who knows what else.

I think 8.5 billion dollars of extra work is very hard to award. I think there are very few people if any people in the U.S. government who could credibly promise to award 8.5 billion dollars of work which Microsoft could bid on.

This is still overseas cash, for which it otherwise doesn't have much use. What's it doing with its spare US cash, which is real money? It's using it to buy back its own shares.

Buying Skype, Nokia and Minecraft is gambling, but what are the odds that one of these will ultimately move the share price more than buying back a few shares?

Am I missing something? I don't see an indication that they will be laid off. It really doesn't make any sense to have that kind of staff in Silicon Valley anymore. In reality, it makes no sense to have people in expensive locations like Silicon Valley / SF or NYC at all.

> A Microsoft spokesperson confirmed the Silicon Valley research lab is closing this Friday, and noted that an undisclosed number of those researchers will be offered jobs at other Microsoft Research labs.

That would imply that these are layoffs.

I imagine the short term ROI for Minecraft is much higher.

That isn't to say the SV team isn't doing great work that could eventually be of colossal importance... but if it can't be quantified on a spreadsheet, the bean-counters don't consider it.

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