Microsoft recently announced that they will be laying off some employees who work on mixed reality, specifically those involved in the development of the HoloLens 2 augmented reality headset. This decision comes as a part of a broader restructuring of the Mixed Reality organization, which aims to focus on other key areas within the company. Despite the layoffs, Microsoft has assured that they will continue selling the HoloLens 2 device and supporting existing customers and partners.
The HoloLens has faced its fair share of challenges since its launch in 2015. While the U.S. Defense Department showed interest in a modified version of the device, known as the Integrated Visual Augmentation System, users reported experiencing discomfort, such as nausea, while using the device. This raised concerns about the practicality and effectiveness of the technology. Additionally, Microsoft’s decision to discontinue several keyboard models in the past has also caused frustration among loyal customers.
In recent years, Microsoft has shifted its focus towards artificial intelligence and other emerging technologies. The company has invested heavily in commercializing AI, deploying Nvidia graphics processing units for various applications, including a chatbot and OpenAI’s ChatGPT. These AI features have been integrated into Microsoft 365 productivity applications, offering users the ability to automate tasks such as writing memos, drafting presentations, and summarizing meetings.
Despite the growing interest in augmented reality and virtual reality technologies, Microsoft made the surprising decision to reduce its investment in these areas in December. The deprecation of Windows Mixed Reality, which supported applications for head-mounted displays, signaled a shift away from AR/VR development. This move was further compounded by the cancellation of a third version of the HoloLens, as reported by Insider in 2022.
The introduction of Apple’s Vision Pro augmented reality headset in January provided stiff competition for Microsoft in the mixed reality space. While Microsoft continues to support features like Mesh, which enables three-dimensional video calls in headsets, the decision to scale back on hardware development raises questions about the company’s future in the AR/VR market. With the ongoing layoffs and reorganization, it remains to be seen how Microsoft will navigate the evolving landscape of mixed reality technology.
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