Big Tech Faces an Augmented Reality

Making and Selling Hardware Is … Hard

Despite all the buzz surrounding the metaverse and related products like virtual reality headsets, many companies are starting to realize that making hardware for this type of technology is well … hard.

Meta (META) for example, is reportedly ditching its plans to release commercial AR glasses. Alex Kipman, the executive leading Microsoft’s (MSFT) HoloLens project, left the company last week. And Apple’s (AAPL) Worldwide Developers Conference for 2022 made no mention of AR glasses, which have been rumored to be in development.

Quite the Spectacle

Snap (SNAP) was one of the first companies that found out that making and selling this type of hardware was difficult. In November 2016, the tech company released Spectacles smart glasses, which allow users to record video for its app, Snapchat. Back in 2017, Spectacles lost roughly $40 million for the company.

The crux of the matter is that manufacturing, marketing, and encouraging consumer adoption of AR hardware is extremely difficult. Producing a product that includes artificial intelligence, motion-capture capabilities, and computing power for machine vision is not easy. The product needs to do all of this seamlessly and look cool too, which is a tall order.

Software First

Many of these big tech companies are now refocusing their efforts on AR software. Take Snap for example. On average, over a quarter of a million people engage with Snapchat’s AR software every day. Users can shop virtually, try on shoes or eye shadow, and even learn American sign language.

Another positive example is Niantic’s “Pokémon Go,” which was released in 2016. Since its launch in 2016, the AR-based smartphone game has generated $6 billion. Besides the game “PUBG,” Niantic’s “Pokémon Go” has amassed the most sales of any game launched in 2016 or after.

Zooming out, most of the tech giants do want to create some piece of hip hardware at some point that will allow users to immerse themselves in virtual and augmented worlds. But for the time being, many are coming to grips that in order to get there, they need to nail the software first.

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