Microsoft Shifts Strategy, Reducing Emphasis on HoloLens and Mixed Reality Hardware
Microsoft’s mixed reality division appears to be drawing to a close following the termination of its multi-billion-dollar IVAS/HoloLens contract with the U.S. military. Recent developments indicate that Microsoft is moving away from hardware development in its mixed reality segment, while still ensuring that support for HoloLens2 hardware and software will continue through 2027, as previously outlined.
This move corroborates earlier reports that detailed a limited period for purchasing HoloLens2 devices. In tandem with this announcement, Microsoft released what is being recognised as the final major feature update for HoloLens2. While minor security and stability updates are planned until 2027, this update signifies the last significant change to the device, introducing modifications to its framework and adding two new applications.
The first-generation HoloLens, however, will not benefit from continued security or software updates after the designated support period. Meanwhile, security and significant functionality support for HoloLens2 will be maintained until December 31, 2027.
In connection with the IVAS program, Microsoft has indicated a shift in focus toward cloud and AI technologies that will underpin the situational awareness platform of IVAS. The transition follows the loss of the HoloLens U.S. military contract for the Integrated Visual Augmentation System, a project valued at roughly $22 billion. Responsibilities for the development and production of a mixed-reality device to succeed Microsoft’s work on IVAS have now been handed over to Anduril, a company led by Palmer Luckey, known for founding the virtual reality firm Oculus.
Anduril is set to assume the task of developing the mixed-reality device intended to replace the HoloLens-powered IVAS system. Microsoft’s IVAS project experienced a series of difficulties over the years, and it received persistent negative feedback regarding its performance. Despite these challenges, the advantages offered by mixed-reality devices for defence applications remain a priority for the U.S. military.
The diminishing support for the HoloLens, a decline that began as key figures such as Alex Kipman distanced themselves from the project, has contributed to its gradual discontinuation. The U.S. Army appears to be seeking a more dependable hardware partner to advance the IVAS program, a need that Anduril is positioned to fulfil. However, the U.S. Army has indicated that final agreements regarding Anduril’s involvement are still being negotiated.
