Microsoft Gives up on Metaverse Dreams, Shifts Focus to Real-World Profits
Microsoft is moving further away from the metaverse and discontinuing its HoloLens mixed reality headsets. | Credit: Jeenah Moon / Getty Images.
- Microsoft is no longer supporting its HoloLens mixed reality headsets.
- The $3,500 headset had attracted notable support in enterprise markets.
- BigTech has increasingly moved away from the once-hyped metaverse dream.
Microsoft is set to discontinue its HoloLens mixed reality headsets as the company follows suit with the rest of BigTech and shifts away from dreams of a metaverse.
The move comes as interest and demand for virtual reality (VR) and augmented reality (AR) continue to wane, with BigTech companies, such as Meta, shifting resources to more profitable areas.
Microsoft Ditches HoloLens and Metaverse
The first version of HoloLens, which was launched in 2016, will have software support cut on December 10. HoloLens 2, the 2019 upgrade, will receive software updates until the beginning of 2028.
The $3,500 headset attracted notable support in enterprise markets, as it targeted real-world usages like healthcare and manufacturing.
In 2018, the tech giant controversially confirmed it had signed a deal with the U.S. Army to create a militarised version of the headset for the U.S. Army. Microsoft said it remained committed to carrying out this deal.
BigTech Turning Away From Metaverse?
The hype surrounding the metaverse initially promised a transformative digital world where people would interact, work, and socialize in immersive virtual environments.
The vision led major companies, most notably Meta, to invest heavily in virtual and augmented reality technologies.
When Zuckerberg rebranded Facebook as Meta in 2021, he spoke of a future where people would seamlessly jump between immersive digital environments using virtual and augmented reality.
However, as time went on and billions of dollars were spent, it became clear that the mass of technology required to support a fully immersive metaverse was greater than initially imagined.
Meta’s landmark metaverse product, Horizon Worlds, was widely criticized for its low-quality graphics and extremely clunky user experience.
The product became a key talking point in how far the metaverse had to go – and how misguided Zuckerberg’s grand promises were.
Virtual Reality Interest Weakening
Economic factors have also influenced Microsoft and other companies to retreat from the metaverse. With rising inflation and overall economic downturns, enterprises have been forced to refocus their efforts on more immediate and profitable ventures.
Sales of virtual reality and augmented reality headsets, the key piece of hardware for the metaverse, declined 67.4% year over year in the first quarter of 2024, according to a report from global market intelligence firm ID.
However, Jitesh Ubrani, research manager at IDC, said that mixed-reality products like the Apple Vision Pro could eventually take the lead as advanced hardware.
“With mixed reality on the rise, expect strictly virtual reality headsets to fade in the coming years as brands and developers devise new hardware and experiences to help users eventually transition to augmented reality further down the line,”
This is clear with Meta’s unveiling of its augmented reality glasses, named Orion , during its annual Connect conference last week.
“For now, I think the right way to look at Orion is as a time machine,” Zuckerberg said. “These glasses exist, they are awesome, and they are a glimpse of a future that I think is going to be pretty exciting.”
Microsoft Leading With AI and Cloud
Like other companies, Microsoft is seeing greater returns in AI and cloud than it ever did with a metaverse dream.
In April, Microsoft Cloud reported revenue of $35.1 billion, up 23% year-over-year.
In an earnings call, Microsoft chief financial officer Amy Hood said the tech giant’s near-term AI demand currently outweighed its supply.
CEO Satya Nadella said its AI Copilot stack was “orchestrating a new era of AI transformation, driving better business outcomes across every role and industry.”
Meta Axes Mixed-Reality Headset: Is Zuckerberg’s Metaverse Dream Dead?
