Microsoft Drastically Scales Back Metaverse Project, Focuses On AI

While Meta takes a monthly billion-dollar haircut on its metaverse strategy, Microsoft is also struggling.

At least as it relates to the here-by-tomorrow potential of metaverse virtual world platforms, the use-case realities of which are increasingly running into real-world brick walls.

This, as the Washington-based tech behemoth has reportedlysunset the 4-month old team it formed just last October to build out the company’s industrial metaverse.

Microsoft’s surprise change of course on its industrial metaverse initiative reveals the pitfalls of investing in next-generation technologies that offer a preview of exciting progress but aren’t quite ready yet for enterprise adoption.

The industrial metaverse group’s 100 or so team members were all laid off as a part of the sweeping headcount reduction Microsoft undertook at the beginning of this year.

Read more: Microsoft Aims For AI-Powered Version Of Bing

“First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less,” Microsoft CEO Satya Nadella wrote in a message to employees as the company eliminated 10,000 positions, asreported earlier by PYMNTS.

The company is also pulling back on its generative artificial intelligence-powered chatbot after the future-fit AI solution made headlinesfor all the wrong reasons and was described by a New York Times (NYT) reporter as “a moody, manic-depressive teenager who has been trapped, against its will, inside a second-rate search engine.”

The round of layoffs affected Microsoft’s HoloLens mixed reality (MR) hardware group and its Xbox division as well, causing industry observers to question just what the state of the tech giant’s virtual reality (VR) and metaverse aspirations might be.

Gaming engines, like those used across the Xbox platform, and VR/MR headsets, like the HoloLens, are widely considered two of the most critical foundational software and hardware elements of any metaverse-based experience.

On a blog post published after the layoffs, Microsoft stated that “HoloLens and Dynamics 365 are key components of Industrial Metaverse deployments, connecting the benefits of digital transformation to frontline workers in field service, factory operations, and many other use cases.”

The company’s blog post added that “We are also investing in richer and more immersive collaboration experiences in the metaverse with Microsoft Mesh … what we’ve learned has helped set a foundation for our shift to Microsoft Mesh, to become a platform that offers the widest opportunity to all involved, including creators, partners and customers.”