Microsoft is slowing down virtual reality and betting (more) billions on AI technology

Microsoft CEO Satya Nadella called the Metaverse “the next wave of the Internet” in January 2022. But barely a year later, that wave seems to be leveling off quite a bit.

At the beginning of last week, Microsoft announced that it would lay off about 10,000 employees – about five percent of the workforce – by the end of March. CEO Nadella declined to comment on which areas are specifically affected by the layoffs.

We now know that the range of hardware products is being reduced and that the areas of virtual reality and mixed reality are being cut back enormously. Several teams, including device developers and game studios, are affected by the measures taken.

AltspaceVR shuts down

Microsoft is rebalancing its bets on the company’s future, he notes Tech blog Windows Central. Last week, the entire team behind the virtual reality platform AltSpaceVR was fired.

Those responsible had previously announced via Twitter that the platform would be shut down on March 10.

Launched in 2013 before the first major VR hype, the AltSpaceVR platform was long considered the flagship application for “social VR” before it ran into financial difficulties in 2017 and was bought by Microsoft.

Microsoft mesh should be the successor to AltSpaceVR, but it remains to be seen how serious the company is with the so-called “Metaverse”.

Microsoft Mesh is an infrastructure platform to connect various VR and AR devices to normal computers. Nadella says the company is focusing on the software so that all users can benefit regardless of what device they are on.

The development team of the Mixed Reality Toolkit (MRTK)an open source developer interface for AR and VR headsets initiated by Microsoft.

Notes from Windows Central:

As a reminder, Mark Zuckerberg, who made his Facebook group Meta famous for believing in VR technology, announced massive budget cuts last November and laid off 11,000 employees.

What about ChatGPT?

On Monday, AI developer company OpenAI (ChatGPT) and Microsoft announced the expansion of their collaboration. Accordingly, the Windows group is investing several billion dollars “to accelerate AI breakthroughs and ensure these benefits are shared globally.”

Specifically, Microsoft should invest even more in the development and use of supercomputing systems to support OpenAI research. In addition, with its Azure platform as an exclusive cloud partner, Microsoft benefits from the great interest in ChatGPT and Co.

And the Hololens?

According to the Bloomberg report, Microsoft wants to stop working on the Hololens variant for the US Army (IVAS) Reduce. The extent of the austerity measures is not known.

Recently, the US Congress canceled a $400 million contract for the combat headset due to technical and ergonomic concerns of users.

The total contract for the military Hololens would be worth up to $22 billion over 10 years. But Microsoft’s VR technology has so far failed to meet the needs of soldiers. They complained of eye pain and headaches, among other things.

Like the military HoloLens, the commercial variant also seems to be in limbo, according to observers. Hololen’s co-inventor Alex Kipman left Microsoft in 2022 after more than 21 years with the company.

Numerous leaks surrounding the departure would not shed a good light on the condition of the Hololens team, it is said. High-ranking employees moved to Meta and Google.

Recently there were rumors that Microsoft had no significant roadmap for the device. A possible collaboration with Samsung should therefore be off the table.

Sources