While Meta faces a $1 billion monthly haircut for its Metaverse strategy, Microsoft is also struggling.
At least in relation to the here-of-tomorrow potential of metaverse platforms for virtual worlds, whose use-case realities are increasingly hitting real walls.
This comes as the Washington-based tech giant has reportedly hired the 4-month-old team it formed just last October to build the company’s industrial metaverse.
Microsoft’s surprising shift in direction on its Industrial Metaverse initiative highlights the pitfalls of investing in next-generation technologies that preview exciting advances but aren’t quite ready for corporate adoption.
The Industrial Metaverse Group’s roughly 100 team members have all been laid off as part of the sweeping downsizing Microsoft enacted earlier this year.
“As we’ve seen customers accelerate their digital spend during the pandemic, we’re now seeing them streamlining their digital spend to do more with less,” Microsoft CEO Satya Nadella wrote in a message to employees when the company cut 10,000 jobs previously reported by PYMNTS.
The company is also pulling away from its generative artificial intelligence chatbot after the future-ready AI solution made headlines for all the wrong reasons and was described by a New York Times (NYT) reporter as “a cranky, manic-depressive teenager who became trapped against his will in a second-rate search engine.”
Read more: Metaverse mapping advances promise trickle-down improvements IRL
The round of layoffs also affected Microsoft’s HoloLens mixed reality (MR) hardware group and its Xbox division, leading industry watchers to wonder what the state of the tech giant’s virtual reality (VR) and metaverse aspirations might be.
Gaming engines like those used on the Xbox platform and VR/MR headsets like the HoloLens are widely considered to be two of the most important foundational software and hardware elements of any Metaverse-based experience.
In a blog post published after the layoffs, Microsoft stated, “HoloLens and Dynamics 365 are key components of Industrial Metaverse deployments that bring the benefits of digital transformation to frontline workers in the field, factory operations, and many other use cases.”
The company’s blog post added, “We’re also investing in richer and more immersive collaboration experiences in the Metaverse with Microsoft Mesh… what we’ve learned has helped set a foundation for our move to Microsoft Mesh to become a platform that delivers.” the biggest opportunity for everyone involved, including developers, partners and customers.”
A Microsoft representative did not immediately respond to PYMNTS’ request for comment.
Microsoft’s HoloLens product has had a bumpy few months over the past few months. In January, Congress denied a US Army request to purchase several thousand devices under a contract worth over $400 million over concerns about field testing of the VR/MR glasses reportedly being used at US -Soldiers were left suffering from nausea, headaches and other physical impairments affecting their use.
Still, Microsoft is far from alone in pushing into a new, virtual-first industry. Tech rival Apple Inc. recently announced it was delaying development of its lightweight augmented reality (AR) glasses due to unforeseen technical challenges.
Despite initial plans to launch the AR device in 2023, Apple pushed back the launch to 2025 and has now been postponed indefinitely.
An evolving world has evolving needs
Dubbed internally as Project Bonsai, Microsoft’s now-defunct Industrial Metaverse division was formed to develop intelligent software interfaces to operate the control systems behind industrial robotics and transportation networks and power plants.
PYMNTS has previously highlighted how “for industries like the manufacturing and automotive companies that have historically relied on tangible physical prototypes and scale models, or the time-consuming and expensive wind tunnel testing utilized by aerospace companies and others, the industrial metaverse is stands for the beginning of a new era.”
Some industry observers believe the risk environment facing Metaverse and VR division of Meta could cost it a $14 billion loss in 2022 alone.
In today’s challenging economic environment, it can make sense for companies to prioritize shorter-term projects that can generate revenue now over projects that require a longer runway to become profitable.
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