Microsoft Makes Drastic Cuts to Mixed Reality and VR Teams

Microsoft has eliminated some of its mixed reality and augmented reality development teams. 

For instance, Microsoft's entire team working on its Mixed Reality Toolkit (MRTK) has been "eliminated," according to Microsoft developer Finn Sinclair, in a Jan. 19 Twitter post. Also, Microsoft will be "shutting down" AltspaceVR on "March 10, 2023," according to this Microsoft "Overview" document and the AltspaceVR Web site. Additionally, this month saw a softening in Congressional funding for the U.S. Army's HoloLens contract, according to a Jan. 12 report by

Those changes, coming with Microsoft's planned 10,000 job cuts, suggest a pullback of sorts from the company's highly publicized efforts centered on Microsoft Mesh, a mixed reality platform for creating avatars to represent people in virtual spaces.

Microsoft, though, recently showed off Mesh as part of the Davos, Switzerland World Economic Forum event.

Mixed Reality Toolkit Team Axed
The cutting of the MRTK team at Microsoft is somewhat surprising as MRTK is a component that's used with Microsoft Mesh.

MRTK was recently announced at generation 3. It's a "Microsoft-driven open source project to accelerate cross-platform mixed reality development in Unity," a games engine platform offering from Unity Technologies for 2D and 3D games development.

AltspaceVR Ending in March
Also ending will be AltspaceVR, Microsoft's platform for "live mixed reality experiences," which is used for meetings with avatars. Microsoft will be "shutting down" AltspaceVR on March 10, 2023.

Microsoft's AltspaceVR "Overview" document included a note stating that AltspaceVR will turn into some sort of "community space," with age-appropriate controls. However, its fate wasn't really described.

AltspaceVR conceptually has been part of the Microsoft Mesh platform for developing mixed reality apps for headsets. AltspaceVR was described as enabling "new enterprise capabilities" for Microsoft Mesh, per this March 2021 Microsoft Tech Community post, which offered the following chart:

[Click on image for larger view.] Figure 1. The Microsoft Mesh platform for developers, which included AltspaceVR apps (source: March 2, 2021 Microsoft Tech Community post).

Microsoft Mesh is Microsoft's mixed reality platform, based on Azure services. It's aimed at creating spaces for large virtual meetings. It works with HoloLens, Microsoft's mixed reality or augmented reality headset, via the Mesh App.

HoloLens Setback
HoloLens, Microsoft's headset for mixed reality experiences, suffered an apparent setback when Congress cut back on the U.S. Army's funding for it. HoloLens is getting tested for use in combat operations as part of the Army's Integrated Visual Augmentation System.

Congress just allowed $40 million to correct HoloLens flaws out of an Army request for $400 million for the fiscal year, according to a Jan. 12 report by Microsoft's headsets were said to have caused "headaches, eyestrain and nausea" during and after 72-hour test scenarios, per the report.

The Army's HoloLens contract, estimated by Microsoft at $21.88 billion, had been put on hold back in 2021 after undergoing field tests, but was resumed in 2022.

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.