HoloLens Dead: Microsoft’s AR Business Dreams End

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Microsoft’s HoloLens 2 was an earnest attempt by the company to establish a strong presence in the virtual reality space. Despite the initial ambition, the headset struggled over the years. On Tuesday, Microsoft announced the cessation of its HoloLens efforts. For current HoloLens 2 owners, support will be available for a few more years before it ultimately ends. Production of the HoloLens 2 is set to conclude, and there are no plans for a HoloLens 3.

The demise of the HoloLens 2 was confirmed by Microsoft in a statement to UploadVR. The company will continue to provide updates addressing “critical security issues and software regressions” for the HoloLens 2 until 2027. By 2028, support for the mixed reality device will be fully discontinued. The remaining project under the HoloLens brand is the Integrated Visual Augmentation System (IVAS), which aims to develop augmented reality glasses for the U.S. Army.

Initially marketed as a device geared towards enterprise rather than everyday consumers, Microsoft’s 2022 announcement highlighted the potential applications of AR goggles for industrial environments, such as factory floors.

While the end of HoloLens 2 marks a significant point, the cessation of support for the original 2016 HoloLens is also noteworthy. Microsoft will discontinue security updates for the original HoloLens after December 10, 2023. Despite efforts to develop a HoloLens 3, internal friction within the development team has hindered its progress. Some developers advocated for a consumer-oriented focus, unlike the enterprise-targeted HoloLens 1 and 2. Many of these developers have since transitioned to Meta.

Microsoft’s announcement comes at a time when Meta has made significant strides in the AR/VR market, as evidenced by recent revelations at Meta’s Connect conference. Meta introduced a $300 Meta Quest 3S budget headset and its first pair of true AR glasses, dubbed Orion. These AR glasses, reminiscent of bulky sunglasses, feature a microlens display and a processing unit that fits in a pocket, enabling the display of AR content.

This development aligns with what Microsoft initially aimed to achieve with HoloLens. The revival of competition in the AR space is evident, as Meta collaborated with Magic Leap, a significant player in VR technology, to integrate AR visualization technology into its offerings.

Despite the hurdles faced by the HoloLens 2, the IVAS project remains crucial for Microsoft’s collaboration with the U.S. Army. The 10-year, nearly $2.2 billion contract indicates a significant investment in developing military-grade AR headsets. Recent updates suggest that field tests for IVAS 1.2 have shown improvement due to a slimmer form factor and enhanced low-light sensors. The U.S. Army plans to conduct a company-level test of the headset in 2025, with a decision on wider production expected next year. The Army has requested $255 million in the latest congressional budget to procure over 3,000 additional IVAS headsets by 2025.

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