Microsoft’s Mixed Reality Future is Burning Down as Layoffs Announced

Microsoft Hololens headset in front of a flame background
Credit: Microsoft

Microsoft Hololens headset in front of a flame background
Credit: Microsoft

Another day brings another round of layoffs in the technology industry. Since the COVID bubble burst over the past few years, companies in both the technology and gaming sectors have been laying off employees, with Microsoft being one of the biggest culprits recently.

The Hololens line of mixed reality hardware, far from being one of the best VR headsets, has been available since 2016, with the second-generation Hololens 2 arriving in 2019. While it has never been gaming-focused, Hololens has inspired some gaming ideas, such as the mixed reality Pokémon Go demo.

There was also an attempt to introduce Hololens into the military. The US Army spent billions on Hololens before realizing that the headsets made soldiers sick, potentially putting them at risk. However, while Hololens never found great success in the consumer market, it was one of the first devices of its kind and likely inspired the Apple Vision Pro.

Despite this, Microsoft is now cutting back on its mixed reality technology. As part of a recent batch of layoffs, Microsoft is letting go of over 1,000 employees in its mixed reality department, as well as in Azure for Operators and Mission Engineering.

In a statement to The Verge, Microsoft spokesperson Craig Cincotta said, "We will continue to invest in W365 to reach the broader Mixed Reality hardware ecosystem. We will continue to sell HoloLens 2 while supporting existing HoloLens 2 customers and partners."

Last year, Microsoft laid off over 10,000 employees, but the company continues to chase trends. Earlier this year, it opened Copilot Pro for AI enthusiasts who aren't trying to remove Copilot from Windows 11 like many others. Additionally, they revealed Recall, an AI that creates snapshots of your PC.

This move seems strange, given that while VR headsets aren't mainstream, many companies are investing in the industry. Sony's PSVR 2 is getting PC support (though the best features are missing), and the company is creating an XR headset. LG is also creating an XR headset that could rival the Apple Vision Pro, and the Quest 3 is doing extremely well in Steam Hardware Surveys. These layoffs are an odd decision, and it's uncertain if they will pay off in the long run.

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