HoloLens is the latest victim of Microsoft’s hardware struggles

When I first tried Microsoft’s HoloLens headset, it blew my mind. I played Minecraft on a coffee table, and the virtual explosions made it look like the table really had holes in it. I had to lift the headset off my head to make sure there weren’t real bats flying out of the walls around me. At the time, in 2015, HoloLens was the most intriguing product from Microsoft in years. It felt like an early look at the future beyond smartphones, where everything in the real world was suddenly a canvas for holograms. But like many Microsoft hardware products, it didn’t survive long enough to make that future a reality.

The early demos, which also included a simulation of walking on Mars, were far more impressive than the real HoloLens experience when it shipped a year later. Microsoft used prototype units of the HoloLens for the initial demos to the media, which tethered goggles to a mini computer you had to wear like a lanyard around your neck. Microsoft made testers lock away their smartphone to ensure nobody captured footage of this prototype hardware.

The field of view and immersion on the $3,000 HoloLens that shipped to developers in 2016 wasn’t nearly as impressive as that initial demo of Minecraft. It was an early sign that it was going to take years to bring a truly immersive augmented reality experience into a headset that was lightweight, affordable, and comfortable to use.

The HoloLens 2 soon followed in 2019, with an improved field of view, eye-tracking sensors, and an entirely different display system — all packaged in a more comfortable headset. The price was still high at $3,500, and Microsoft decided to only sell the HoloLens 2 to businesses, pivoting away from the consumer audience it had seemed to be courting. It was another sign that augmented reality headsets were years from becoming mainstream.

HoloLens 2 arrived just months before the covid-19 pandemic began. Many businesses turned to upgrading webcams and laptops for remote work during 2020 and 2021, instead of buying $3,500 headsets. While Toyota, Audi, L’Oreal, Renault, Mercedes-Benz, and other companies have used HoloLens in limited numbers, it was just a costly experiment for most of Microsoft’s HoloLens customers.

Shortly before the HoloLens 2 headset went on sale, Microsoft was also awarded a $480 million contract with the US Army to develop a militarized version of the HoloLens headset. Looking back, it feels like a lot of Microsoft’s mixed reality struggles started there. It angered a number of Microsoft employees, who publicly demanded that Microsoft cancel the contract and cease developing technology for military use.

By 2021, employees on the HoloLens team started departing in noticeable numbers. More than 40 of them joined Meta, the social media giant that was rebranding from Facebook at the time to chase the metaverse and mixed reality headsets. Alex Kipman, then the leader of HoloLens and one of Microsoft’s top technical fellows, left Microsoft following misconduct allegations the next year.

Just six months after Kipman’s departure, Microsoft announced a changed “hardware portfolio” amid layoffs. The job cuts hit the HoloLens teams hard, and it was clear it was the end of the road for the HoloLens as we know it today. Further layoffs hit the HoloLens team earlier this year, just months before Microsoft quietly confirmed the end of production of its HoloLens 2 headset.

In many ways, the HoloLens was too much too soon. Microsoft has been either too early or too late to the market with a lot of its failed hardware efforts in the past.

Microsoft cofounder Bill Gates launched the company’s SPOT smartwatches onstage at CES in 2003, which used FM radios to transmit information like news, sports scores, and weather updates to your wrist. Five years later, Microsoft killed off its SPOT initiative. Microsoft was also early to tablets with its Windows XP Tablet PC Edition in 2002, failing to capitalize on its head start with the iPad popularizing tablets less than a decade later. The Surface Pro eventually clawed back some of the lost time, popularizing the tablet and laptop hybrid form factor.

The Zune, Kin smartphones, and Windows Phone also failed to compete with alternatives. Microsoft even tried its hand at fitness devices with the Microsoft Band in 2014, before discontinuing it just two years later. Even the Kinect motion sensor, which sold well during the Xbox 360 era, met its demise after Microsoft quickly unbundled it from the Xbox One to close the $100 gap between the Xbox One and PS4. Four years after the Xbox One launch, Microsoft stopped manufacturing Kinect.

Having failed with HoloLens, Microsoft’s mixed reality dream now seems more reliant on Meta hardware than ever before. Microsoft has partnered with Meta to bring its Teams, Office, Windows, and Xbox apps to Quest VR headsets, and you can bet it’ll be ready with similar apps for Meta’s upcoming AR glasses when they finally ship. Meta’s hardware is just a prototype right now, as it’s expensive ($10,000) and too complicated to manufacture for the masses. Meta CEO Mark Zuckerberg has made a multibillion-dollar bet on AR glasses replacing smartphones, but it still feels like it’ll be years until we find out if it was worth it. I have a feeling it’ll end up like HoloLens, with these companies pursuing a new AI hardware dream instead.

Microsoft has now pivoted toward bringing its HoloLens learnings to Microsoft Teams through support for VR headsets and 3D meetings. Microsoft Mesh, the company’s mixed reality platform, is also being used to help businesses build 3D environments. And Microsoft has teamed up with Anduril Industries, the military tech company started by Oculus VR founder Palmer Luckey, to improve its IVAS mixed reality headsets used by the US Army. So unless you’re a soldier, you won’t be wearing a HoloLens anytime soon.

Still, we might see Microsoft resurrect its mixed reality business thanks to a Samsung partnership that could come to fruition in 2026. It’s not a HoloLens 3, but the rumored device sounds like a competitor to Apple’s Vision Pro, focused on gaming and video content. After Microsoft’s recent 24H2 update to Windows 11 made Windows Mixed Reality headsets useless, I’d expect consumers are going to be wary of any Microsoft-made headset in the future, though.

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