A report from Insider suggests morale in Microsoft’s mixed reality teams is being affected by “confusion and strategic uncertainty as different factions argue”.
Insider’s Ashley Stewart says sources tell her the confusion stems from whether Microsoft should continue to make its own hardware or focus only on providing the software platform for other device makers, amid skepticism from executives about the team’s business value.
This software strategy is reportedly favored by CEO Satya Nadella. Microsoft offers technologies the Azure Kinect, Spatial Anchors, and Mesh which could be part of efforts to power future VR or AR headsets, but Stewart reports three sources told her HoloLens 3 was cancelled last year following the formation of a partnership with Samsung. The move “inflamed divisions within the team” with one of Stewart’s sources calling the partnership a “shit show”.
“There’s been a conscious pivot to make investments within mixed reality be financially sound”, one former employee reportedly said.
The report could point to the internal conflict as a potential factor in the wave of defections Meta reported by Bloomberg and The Wall Street Journal last month. Unlike Microsoft, Meta is aggressively targeting consumers with the $300 Quest 2 and has announced major plans to “build the metaverse” on the timescale of decades.
In Stewart’s report both Microsoft and Samsung declined to comment, while on Twitter the head of Microsoft’s mixed reality teams Alex Kipman wrote “don’t believe what you read on the internet. #HoloLens is doing great and if you search said internet they also said we had cancelled #HoloLens2… which last I checked we shipped with success [)-) ”
— Alex Kipman (@akipman) February 3, 2022
That tweet from Kipman, who said last year that Microsoft is “absolutely” working on a HoloLens for consumers, doesn’t seem to directly refute the claim of HoloLens 3 being canceled in favor of a Samsung product.