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Microsoft shuts down social VR pioneer AltspaceVR • TechCrunch

AltspaceVR has had a few close calls over the years, but the company that built virtual social spaces long before “metaverse” was a household name is closing for good this time.

After announcing it would close shop in 2017, Microsoft stepped in and brought the company under the wing of the tech giant. Now Microsoft is undergoing AltspaceVR’s virtual reality platform, a web of immersive social spaces that invited people to interact with friends or colleagues as 3D avatars.

AltspaceVR will no longer exist from March 10, and Microsoft says it will focus more resources on its mixed reality platform Microsoft Mesh.

“We look forward to what’s to come, including our launch of Microsoft Mesh, a new platform for connection and collaboration, starting with enabling workplaces around the world,” the announcement reads.

“In the near term, we are focusing our VR efforts on workplace experiences, learning from and working with our early customers and partners, and ensuring we are delivering a foundation that enables safety, trust and compliance.”

Outside of gaming, Microsoft has built many of its products with an entrepreneurial mindset, and VR and mixed reality is no different. The company notes that it plans to expand its VR plans to consumers once established for the workplace.

AltspaceVR may never have built a formidable user base – a difficult task in VR, given the bespoke hardware required – but the company was very early with social applications of virtual reality.

By 2015, AltspaceVR created a robust social VR platform where users could stroll through wood-paneled rooms with serene views, watch Taylor Swift music videos together, or surf the web via a virtual browser. Spatial audio made the experience more immersive, replicated the way humans perceive sound in real-life environments, and laid the groundwork for virtual events.

At the time, most of the resources and attention in VR went to advanced gaming applications – not virtual hangouts. Meta launched Horizon Worlds six years later, an AltspaceVR-like experience with its own innocent neutral interiors and not-too-lifelike avatars.

It’s not clear if Microsoft plans to roll the product into its other VR efforts or abandon the project entirely. Given the timing, AltspaceVR’s fate is likely tied to Microsoft’s dramatic company-wide consolidation, which was detailed this week. TechCrunch has reached out to the company for additional information about what is happening with AltspaceVR’s team and technology in light of the news.

Amid layoffs in the deep tech industry, Microsoft announced it will cut 5 percent of its workforce, impacting 10,000 workers. Microsoft CEO Satya Nadella pointed to economic uncertainty and the pullback from the tech boom of the early pandemic as the rationale behind the substantial cuts.

“We will continue to invest in strategic areas for our future, which means allocating both our capital and talent to areas of sustained growth and long-term competitiveness for the company, while divesting in other areas,” said Nadella.

It’s not clear if Microsoft is submitting some of its metaverse plans or if AltspaceVR is merely a victim of broad, company-wide budget cuts. It’s only been a year since Facebook brazenly rebranded itself as “Meta,” sending the industry into a buzzy hype cycle around a more immersive, possibly VR-driven vision for social networking.

A year later, the metaverse discourse has quickly moved through the backlash phase, leaving the future of avatar-driven virtual social spaces hazy. It’s possible that the metaverse never needed dedicated hardware at all – non-VR online worlds will continue to flourish in 2023 – but it’s worth remembering a company that was exploring those possibilities long before the unwieldy giants of technology emerged.

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