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Microsoft’s mixed reality gets a black eye

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The talent exodus and the organisational rejig has dealt a blow to Microsoft’s vision of a mixed reality, making it reroute resources and people at a time when the market for AR/VR is heating up.

The talent exodus and the organisational rejig has dealt a blow to Microsoft’s vision of a mixed reality, making it reroute resources and people at a time when the market for AR/VR is heating up.

You must be in a different world, if you hadn’t heard of the metaverse yet. The word became popular after Facebook renamed itself as Meta last year, and said it would invest $10 billion to build a part of the digital land.

Facebook is not the only company charting a course to make a name for itself in the digital world. Apple, Google, and Microsoft are all putting their teams to work on the yet-to-be-fully understood metaverse.  

The online fancy land is still under construction as tech titans build hardware and develop software for digital avatars of real people to interact and socialise. VR headsets are an important cog in the metaverse. In most cases, it is the gateway to the digital land. These are the eyes for people to view others in the unreal world.

Facebook’s Oculus Quest 2 is the most popular VR product with 78% share of the AR/VR market during 2021. There were 9.4 million VR headsets sold last year, a number that could rise to 13.6 million by the end of this year, according to market intelligence firm IDC. The headsets Meta makes cater to individual consumers and are specifically designed for the metaverse that CEO Mark Zuckerberg envisioned.

At the other end of the mixed reality market is Microsoft. The Window software maker unveiled its augmented reality headset back in 2015 with a $3,000 price tag, a very expensive piece of gadget.

Microsoft’s HoloLens headset was described at that time as “the most advanced holographic computer the world has ever seen.” The device had a self-contained computer with a CPU, a GPU, and a hologram processor. It also enabled spatial sound so people could hear holograms from behind them. The dark visor fixed headsets could sense movement and the environment surrounding the user.

At that point, the HoloLens was a notch above Google’s Glass, which was similar to Microsoft’s device but suffered from a slow hardware and patchy application ecosystem.

Three years after the launch, Microsoft signed a $480 million deal with the U.S. Army to sell customised HoloLens, called Integrated Visual Augmented System (IVAS). The headset augmented the view of a user by overlaying digital objects on top of the real world.

In 2021, Microsoft bagged another large contract with the same government agency. This time around, it would sell over 120,000 HoloLens headsets in a deal worth more than $20 billion over a period of 10 years.

A year on, the software giant is bleeding talent in its augmented reality division. According to a report by the Wall Street Journal, nearly 100 people from the mixed reality department left the company. And several of them moved to Meta Platforms to build its metaverse.

If that wasn’t enough, the brain behind HoloLens and a top technical fellow at Microsoft, Alex Kipman, has resigned following allegations of sexual harassment and verbal abuse. The company is now reorganising its entire mixed reality division, according to an internal memo obtained by GeekWire.

The talent exodus and the organisational rejig has dealt a blow to Microsoft’s vision of a mixed reality, making it reroute resources and people at a time when the market for AR/VR is heating up.



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