The big picture: If all the hype and buzz around a metaverse future seems difficult to grasp, then you're not alone. Microsoft too, it appears, is struggling to realize its vision of the metaverse. Leadership of the company's mixed-reality and HoloLens divisions has been unable to adopt a clear strategy, resulting in low morale, confusion and exodus among employees, as well as canceled projects like the HoloLens 3 that was reportedly shelved last year after Microsoft decided to partner with Samsung. This partnership, where Microsoft does the software and Samsung the hardware, apparently added even more confusion that one Redmond employee described as a "s--t show."
Microsoft has previously demonstrated how it plans to bring the metaverse to businesses with its Mesh for Teams platform. The company also considers its $68.7 billion Activision Blizzard acquisition as 'building blocks' for the metaverse. While such developments may not mean much outside of cartoonish avatars in business meetings and a solid Xbox portfolio, Microsoft's most promising bets for a metaverse future have always been its HoloLens headset and mixed-reality experiences.
However, a Business Insider report has revealed that the company's HoloLens and mixed-reality divisions have been struggling to adopt a unifying strategy for the metaverse. Redmond's enterprise-focused AR headset has made numerous (and impressive) tech demos since its original reveal in 2015, and even managed to secure high-profile clients in the military and automotive space.
However, the $21.88 billion IVAS contract with the US Army that saw deliveries pushed back by a year has now become a 'trouble spot' for Microsoft. The fighting goggles are reportedly suffering from quality issues and have not been deemed as combat ready.
Moreover, a newer version of the HoloLens had also been in the works that Microsoft reportedly scrapped in mid-2021. Whether it was the consumer-focused version or another enterprise AR headset remains unknown. The focus now is on developing software for metaverse platforms, instead of hardware, in line with the vision of Microsoft CEO Satya Nadella.
It's also why the company partnered with Samsung on a mixed-reality device, a decision that didn't go down well with Microsoft employees left confused by a lack of clear strategy. This has also led to an exodus of staff in Microsoft's mixed-reality division, including a couple of 20+ year veterans and over a hundred others, many of whom joined Meta/Facebook over the past year.
Arguably, not even Meta/Facebook has figured out the metaverse, at least on a consumer level, and it now looks like Microsoft might have been a bit too ambitious with the HoloLens. The company says, however, that it's committed to the AR headset and will release new versions in the future.
Perhaps Apple might be the first to convince the world of its metaverse rendition by scoring widespread consumer adoption of its upcoming mixed-reality headset. That is, if it can get around the current design challenges that could delay the launch into next year.