You must be in a different world if you have not heard of the metaverse yet. The word became popular after Facebook renamed itself as Meta last year, and said it would invest $10 billion to build a digital land for people to interact and socialise. Facebook is not the only company charting a course to make a name for itself in the digital world. Google and Microsoft are all putting their teams to build a yet-to-be fully understood online space.
Tech titans are busy building hardware and developing software for digital avatars of real people to interact and socialise. Virtual Reality and Augmented Reality (VR/AR) headsets are therefore, one of the important cogs in this online fantasy land. VR/AR devices are the keys to unlock passage into the digital land. These gadgets take people into the virtual world to meet and greet each other. And some early movers failed to usher in a VR era without these gadgets.
In 2016, Google attempted to corner a share of the market with its Cardboard headset. The disposable spectacle shells allowed users to slide their smartphones into them for short VR experiences. Though the search giant shipped millions of devices to customers for free, it could not make the leap to a consumer headset. Part of the problem was the smartphone used to power these experiences. The phone’s ability to provide immersive on-the-go experiences were limited as 3D apps drained battery and the units were not easy to set up. At this point, stand-alone VR headsets like Oculus Rift and HTC Vive were providing much better user experiences for a few hundred dollars.
According to market intelligence firm IDC, Facebook’s Oculus Quest 2 is the most popular VR device with 78% share of the AR/VR market in 2021. Nearly 9.4 million VR headsets were sold last year, a number that could rise to 13.6 million by the end of this year. The headsets Meta makes cater to individual consumers and are specifically designed for the metaverse that CEO Mark Zuckerberg has envisioned. Not all companies are interested in the retail consumer market where VR will be primarily used for gaming.
At the other end of the mixed reality market is Microsoft. The Window software maker unveiled its augmented reality headset back in 2015 with a $3,000 price tag, an expensive piece of gadget. The Richmond-headquartered company targets enterprise customers to sell its VR gadgets. The industry-defining HoloLens headsets were described at that time of launch as "the most advanced holographic computer the world has ever seen." The device had a self-contained computer with a CPU, a GPU (graphics processing unit), and a hologram processor. It also enabled spatial sound so people could hear holograms from behind them. Complete with a dark visor, the headsets could sense movement and the user’s immediate surrounding.
HoloLens was several notches above Google Glass, which was similar to Microsoft’s device but suffered from a slow hardware and patchy application ecosystem.
Three years after the launch, Microsoft signed a $480 million deal with the U.S. Army to sell customised HoloLens, called Integrated Visual Augmented System (IVAS). The headset augmented the view of a user by overlaying digital objects on top of the real world. In 2021, Microsoft bagged another large contract with the same government agency. This time around, it would sell over 1,20,000 HoloLens headsets in a deal worth more than $20 billion over a period of 10 years.
A year on, the software giant is bleeding talent in its augmented reality division. According to a report by The Wall Street Journal, nearly 100 people from the mixed reality department left the company within a year. Most of them moved to Meta Platforms to build its products for the metaverse.
If that wasn’t enough, the brain behind the HoloLens at Microsoft and the creator of the Kinect camera, Alex Kipman, has resigned following allegations of sexual harassment and verbal abuse. Microsoft developed its industry-defining HoloLens under Kipman’s leadership. The headset became the go to device for engineers to run their mixed reality projects. Several companies used the device to train their employees; in some cases, medical students used them to immerse themselves in clinical procedures. Now, as Kipman leaves the company, its entire mixed reality division is undergoing a reorganisation, according to an internal memo obtained by GeekWire.
The talent exodus and the organisational rejig has dealt a blow to Microsoft’s vision of a mixed reality, making it reroute resources and people at a time when the market for AR/VR is heating up. Some have also pointed out Microsoft’s plans to partner with Samsung to build its VR gadget as possible reason for a churn within the mixed reality division.
VR headsets can potentially dethrone smartphones as the go to devices to connect and communicate. But companies building VR hardware and software are catering to different class of users — some to other businesses, others to individual consumers. Firms are also facing a talent crunch as rivals poach people to build their own products.
The path to a VR future looks blurred for now.