The word yesterday of Microsoft engaging in formal layoffs for the first time in its history was a bit chilling. Microsoft had been recession-proof in the past, but now even it was no longer immune. A total of 5,000 to 6,000 are to be released, 1,400 immediately and the rest over the next 18 months.

It's not that Microsoft doesn't have layoffs, it's just that it has always followed Jack Welch's 20/70/10 rule and weeded out the bottom 10 rather aggressively. So with a regular stream of deadwood exiting the company, it was able to avoid mass cuts over the years.

Now, though, it's not just deadwood being cut. The games division has reportedly taken a pounding, according to the gaming blog Gamasutra (great name, guys) and later confirmed by IGN. Development sources told Gamasutra that a large portion of in-house developers have been let go, including the entire Flight Simulator team.



If that is indeed the case, that would mark the end of an era. If there is an older, active game franchise in the world, I don't know it off the top of my head. Flight Simulator has been around since Steve Ballmer had hair, first hitting the market in 1978 from game publisher subLOGIC. Microsoft would acquire the company in 1982 and keep it updated over the years, keeping it current with newer planes, letting people fly everything from the DC-3 to the Airbus A380 Flying Titanic.

Flight Simulator is unique in that its graphics were far more reliant on the CPU than most games. While it does support DirectX 10 and modern GPUs, most of its graphics used to be vector graphics that were best rendered by a CPU.

Flight Simulator has an extremely loyal fanbase and a huge mod/add-on market, there is the hope that maybe Microsoft will sell the IP off and let someone else continue development. I would certainly hope so. Games don't have to sell on the level of Guitar Hero or World of Warcraft to be a hit and enjoy a long life. I've got a standing invite to visit an editor friend's home for a round of LAN gaming featuring Freelancer, a really great game that came out in 2003 and still enjoys a healthy afterlife through modifications by fans of the series.

But where are my priorities? The game is one thing. I hope you folks formerly in Microsoft's Aces Game Studio are able to find work soon.

It really was remarkable to listen to the Apple earnings call yesterday and hear Wall Street analysts, New Yorkers, most of them, just roll right over for Tim Cook and Peter Oppenheimer by accepting a non-answer on how the company will be run and Steve Jobs' condition.

The press has been excoriated for this lapdog behavior, mostly by Newsweek's Dan Lyons, and rightfully so. All too often, especially in the business press, reporters become too cozy with the companies they cover, and I'm just as guilty of it. I have to regularly remind myself not to let certain companies off too easy.

The press should always maintain what I call a politely adversarial relationship. We can be friendly with the PR people but they aren't our friends and they never say anything without a reason or an agenda to it. Their loyalty is to the company that pays them, and rightfully so. Every reporter knows this, or should: when someone offers you a piece of information, they have an agenda behind it. What's the reason for passing you this info? You can question and you can probe for an answer, and need not stoop to Keith Olbermann levels of obnoxious behavior in doing your job.

Over the weekend I managed to snag a legitimate copy of the Windows 7 beta and installed it on my secondary computer, an Athlon 5600+ with 3GB of memory and nVidia 7800GTX video card. I had a spare hard drive that I could use for the install, so when I'm ready, I can return to the old system with Vista set up and installed.

To be honest, I don't want to. Because this is a secondary computer, I don't stress it as much as my main (Intel Q6600, 4GB, nVidia 9800GT), but the difference is notable already. It's ridiculous to see such a faster, snappier response on a slower computer, but that's the case. Everything is faster and smoother, right down to opening the start window.

The install was very fast, about 20 minutes. Microsoft does need to add a progress meter or something to indicate activity, because at one point I just saw a blank screen saying Windows was being installed, but there was no activity. I feared a lock-up but eventually it progressed.

One subtle improvement that caught my eye was video driver installation. If you've been through a Windows install, you know it defaults to 640x480 resolution. If Windows recognizes your video card, it installs the driver, but you have to reboot to make it take effect. That wasn't necessary here. Late in the install, the screen went blank and came back in high resolution mode, the proper resolution for my monitor. On completion, I checked, and sure enough, both my video card and monitor had been detected and the proper WHQL drivers installed.

Another nifty feature: Windows 7 recognized my router and put it in the Device Smart list. Right clicking on it gave me the option to open the vendor page at Netgear, or open the configuration manager. I chose the latter, and there was the router's config menu, which I normally access by starting a browser and pointing to http://192.168.0.1.

If this keeps up I might be tempted to install it on my main computer. I really, really don't want to have to reinstall all of my favorite apps again, but so far, so good on Windows 7. I can't see any reason why Microsoft can't keep the June deadline it has set for itself.

A former boss of mine is currently working for Vudu, the settop box maker that offers access to 13,000 high definition movies and TV shows. The company has slashed the price of the hardware, from $299 to $99. Ok, you got my attention.

But, the movies are downloaded via a broadband connection, and a high def movie is a few gigs in size. As a Comcast customer, I had only one make or break question: will my downloads count against the 250GB monthly limit?

"Yep."

Sorry, no sale for now.

I consume a fair amount of bandwidth even without theft of intellectual property (let's be real, what do you think people were doing when they downloaded 500GB or more per month?). I have no idea where I stand each month, although Comcast has said it has a meter in the works so we will know how much bandwidth we're using.

"We are in the process of creating a usage meter that will measure consumption for the Comcast account which will be available in the coming months. In the meantime, we offer a meter for free with our McAfee security suite available at http://security.comcast.net/

When the amount of bandwidth consumed is tiny, like downloads from iTunes, usage caps are irrelevant. But now we're looking at a problem for Vudu's business model. My friend informed me that they estimate customers can download 50 movies per month, but that's assuming they don't use bandwidth for anything else.

And let's be honest, it is not in Comcast's best interests to help Vudu since it has its own on-demand offering with high def video.

Comcast's 250GB limit is generous. Word has it that Time-Warner cable is looking at limits as low as 40GB per month.

I have long considered moving to AT&T's high-speed service, or maybe Verizon's FIOS service. But I'm someone tech-savvy. An average user would just live with Comcast for cable and Internet, secure in not coming anywhere near 250GB of use per month, and use Comcast's on-demand service, which falls well short of the Vudu service. Let's face it, few people want to take the hard way out when it comes to technology.

Good luck to Vudu but they are in a tough position.

It's 5 pm PST, and soon Microsoft CEO Steve Ballmer will take to the stage to kick off the Consumer Electronics Show, something his old friend Bill Gates did for years before his retirement. Ballmer is widely expected to announce a public beta of Windows 7, a rumor helped by the fact it's already leaked.

I'm going to go one better and put something on the record before the fact: I think he'll announce the availability of Windows 7 this year, whether it's June 3 as I first reported last September, or in July, or whenever. The signs are there:

• The Windows 7 beta is reportedly in great shape.
• Windows XP has had its lifespan extended to May again.
• Customers who buy a PC after July will get a free Windows 7 migration.

Most important, the channel is hurting. I'm talking Detroit Lions hurting. Intel just ruined everyone's day. What else could goose sales and generate excitement, at least for the second half of the year (back to school, Christmas) then a vastly improved new operating system from Microsoft?

Ballmer will have his biggest audience of the year tonight. This is the time to say it. I have no sources. Just a hunch, the fact that my original source has been proven right on everything up to now, and a bit of applied reasoning. We'll see if it's so.

UPDATE: FAIL. Good grief. I had no idea that Ballmer would try to outdo Phil Schiller of Apple in a disappointing, underwhelming keynote. One more CES keynote like that and the crowd will be clamoring to bring Bill back.

Seen at the Macworld press registration desk (click for the larger view). What more needs to be said?