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The death of Microsoft's Metaverse

Today we’re lending our collective shoulder to the upcoming demise of the Microsoft-wned, virtual reality (VR) social networking platform AltspaceVR.

Announced on the AltspaceVR website on the 20th of January, the AltpaceVR platform will be discontinued as of the 10th of March. The AltpaceVR team’s (and Microsoft’s) focus will shift to supporting immersive experiences powered by Microsoft Mesh – Mesh for Teams, which was first announced way back in November 2021, allows workers users to collaborate in virtual spaces and access Teams from their mixed reality (XR) glasses and VR headsets.

AltSpaceVR was founded in 2013 by Eric Romo as a virtual reality company focused on building social VR experiences. The company's goal was to create a virtual environment where people could gather and interact with each other in a way that felt as natural as real-life interaction.

In 2016, AltSpaceVR was one of the first companies to launch a virtual reality social platform, allowing users to interact with each other, participate in events and activities, play games, and socialize with others in virtual environments. The platform quickly gained popularity among early adopters and was recognized as one of the leading social VR platforms, supporting a variety of VR headsets on Windows, Mac, and Linux operating systems.

Over the next few years, AltSpaceVR continued to grow and expand, adding new features and virtual environments. It allowed people from around the world to come together in a shared, immersive space, regardless of their location in the real world. Users could create and join virtual events, play sports, attend concerts and pool parties, take part in trivia games, meditate, watch movies together, hop into a karaoke bar, watch comedians bomb during amateur night, and even get married!

In 2017 Altspace announced its plans to shutter the business, noting that the company had been unsuccessful in raising the funding needed to keep the platform going. Shortly after, the startup was thrown a lifeline by Microsoft who acquired the company on the back of its potential to play a major role in the future of virtual reality and social computing. CEO and founder Eric Romo exiting the company for a role at product director at Meta (then Facebook).

The announcement by Microsoft that it will be sunsetting the AltSpaceVR platform has come mere days after it announced 10,000 layoffs and changes to its "hardware portfolio". So does this represent a diminishing in Microsoft’s Metaverse ambitions, or just a change in direction? Last year’s SEC filings by Microsoft suggest the latter, and that the discontinuation of the AltSpaceVR platform is just Microsoft following its stated business strategy.

Microsoft acquired AltspaceVR at a time it was promoting a Windows 10-powered HoloLens VR headset and tethered mixed reality headsets from Acer, Dell, HP, Lenovo, and Samsung, and CEO Satya Nadella was endorsing augmented reality alongside artificial intelligence and quantum computing. In its 2022 SEC filings, under page three’s “Embracing Our Future”, Microsoft state that they “are enabling metaverse experiences at all layers of our stack, so customers can more effectively model, automate, simulate, and predict changes within their industrial environments, feel a greater sense of presence in the new world of hybrid work, and create custom immersive worlds to enable new opportunities for connection and experimentation.”

On page five of its Form 10-K, Microsoft states that: “We are accelerating our development of mixed reality solutions with new Azure services and devices. Microsoft Mesh enables presence and shared experiences from anywhere through mixed reality applications. The opportunity to merge the physical and digital worlds, when combined with the power of Azure cloud services, unlocks new workloads and experiences to create common understanding and drive more informed decisions.”

So, while some are mourning the death of AltSpace as the closest thing we have had to a metaverse utopia, and are bemoaning some perceived capitulation by Microsoft to Meta’s Horizon Worlds, or other, less sophisticated platforms like VRChat an Rec Room, here at we think the best is yet to come. Microsoft’s acquisition of Activision Blizzard, home to the World of Warcraft and Call of Duty franchises, and its statement that it “will accelerate the growth in our gaming business across mobile, PC, console, and cloud and will provide building blocks for the metaverse” should provide some comfort.

Don’t forget to leave a comment below!

Daniel McCullough/Unsplash

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