AltSpaceVR shutdown, MRTK and HoloLens layoffs reflect Microsoft’s significant MR/VR business changes

Microsoft’s move to lay off 5% of its workforce recently reflects the inevitable changes coming to the company. One of these changes mentioned by Microsoft CEO and Chairman Satya Nadella includes the company’s “hardware portfolio.” However, based on the recent events like the upcoming AltspaceVR shut down and the entire MRTK team layoff, it seems these adjustments extend to the company’s metaverse and mixed reality efforts.

Last week, Nadella confirmed the software company’s plan to cut the role of its 10,000 employees. In earlier reports, it was claimed that the layoff would hit its HR and engineering departments. Unfortunately, the impact is actually much worse than expected. Bloomberg shared last week that the HoloLens unit was also affected by the job cuts. This seemed predictable, given the company’s difficult IVAS situation, worsened by Congress’ decision to decline the US Army’s request to buy up to 6,900 combat goggles adapted from Microsoft’s HoloLens headsets.

While this job cut in the HoloLens department looks big enough to affect Microsoft’s mixed-reality business, it then decided to push things further by eliminating entire teams involved in its Mixed Reality Toolkit (MRTK) and AltSpaceVR platform. While the fate of the individuals in the MRTK team was confirmed through the former employees sharing the news, Microsoft sealed its decision for AltSpaceVR through its shutdown on March 10.

AltSpaceVR, a social virtual reality platform, was acquired by Microsoft in 2017 in hopes of constructing a mixed-reality ecosystem. The social app allows users to host events and users to socialize and collaborate. However, the Redmond company has a change of plans and now wants to focus this platform on businesses and professionals. As such, Team AltspaceVR said it is sunsetting the platform in March and would start focusing on Microsoft Mesh.

“As we look to the future, we see the opportunity for VR expanding beyond consumer into business and now have an even greater goal: a more open, accessible, and secure version of immersive experiences in the metaverse.” Team AltspaceVR shares. “To achieve that we have made the difficult decision to sunset the AltspaceVR platform on March 10, 2023, and shift our focus to support immersive experiences powered by Microsoft Mesh.”

AltspaceVR also plans to bring this Microsoft Mesh to consumers over time, while current users that will be affected by the shutdown can now download their content.

Collectively, the killing of AltspaceVR and the layoffs in the company spell significant changes in Microsoft’s virtual and mixed reality business. And given that the job cuts comprised entire teams in the said units above, the software company might be really eyeing huge focus shifts this year in its metaverse pursuits. Now, only the future can tell how things will turn out for Microsoft’s VR/MR efforts.