Commentary
‘Tech Job Apocalypse’ throws VR entertainment a curve ball
The recent tech layoffs undermine the development of VR, AR and MR as the post pandemic entertainment landscape offers enormous opportunity.
March 6, 2023 by Kevin Williams
Just a couple months into the New Year, and the ramifications of tectonic change are reverberating round the tech industry landscape. Major restructuring across all the leading social media, tech and entertainment corporations, with a new focus on how best to apply this technology into the commercial, entertainment and enterprise landscape, are under way.
Following the momentous layoff of some 10,000 Microsoft employees, much of the infrastructure purported to be focused on supporting the emerging virtual reality location based entertainment scene undertaken by Windows Mixed Reality has been shuttered.
The reality of the situation is still being played out, but the sacking of the complete development team at Microsoft's Mixed Reality ToolKit operation has also seen the whole of the VR and AR investment, including WinMR, seriously impacted or closed.
The remainder of Microsoft's interests in MR are now relegated to their work on Mesh for Microsoft, a holographic virtual collaboration platform — think virtual-Zoom.
Back in 2018, Microsoft looked to push several VR headset developers and operators towards utilizing their WinMR platform standard and encouraged the creation of a walled garden to ensure control of the emerging LBE VR scene fueled by grandiose projections that the LBE market would be worth $12 billion by 2023.
Grandiose aspirations fade
The grandiose aspirations soon faded as the operation focused more on consumer applications of VR, then when these failed to achieve mainstream adoption, moved towards AR and then MR and the tools they create in the new immersive nexus.
Now following these record layoffs the actual division controlling the toolkits for the WinMR environments has been shuttered.
The remaining team members are now relocated to work wholly on the commercial workspace applications of these tools through the "Mesh for Microsoft Teams" initiative. This initiative is working with Meta on its Quest Pro for deployment in the commercial sector on its MR headset.
At the same time, it was revealed that the veteran social VR platform, AltspaceVR, a popular social engagement platform for VR enthusiasts acquired by Microsoft in 2017, was also to be shuttered.
Where's the support?
And this begs questions for those LBE VR operators who still depend on the WinMR platform and supported VR and AR headsets. Are these applications now seen as being vulnerable with no support or updates?
Obviously, those operators in the VR arcade scene that will be hit the hardest are those who still depend on support of their WinMR VR headsets and platforms. That said, many operators have migrated away from older WinMR systems deployed by HP, Samsung, Pico, Lenovo and Canon, now updating to the latest hardware such as the HTC platform for workday deployment in the harsh environment of VR arcade and free roaming.
Those who still use WinMR systems have, in most cases, taken full control of the firmware or are running custom management platforms. It was this concern — if the corporation would be able to support their grandiose aspirations in Enterprise, including location based entertainment — that had raised concerns back in 2018. No matter what, there will be some impact on the VR scene in general from Microsoft's departure from this aspect of the market.
The record Microsoft layoffs are expected to have other ramifications within the corporation, which has pivoted heavily into AI, having invested some $10 billion into OpenAI.
Studios feel the impact
Sources indicated that several consumer game studios were hit hard, and this could see the cancellation of games in development, with the Xbox console series feeling the sting.
Meanwhile, for the consumer VR community, and those commercial enterprises such as in design, education and simulation that had come to depend on the WinMR or MRTK framework, the next few months will prove difficult.
These restructurings and redevelopments come on the back of major upheavals in the tech and social media sectors. In what some have tried to label the "tech job apocalypse," leading operations in the sector have started 2023 by making major layoffs towards preparing themselves for the changed global financial conditions and to address massive losses incurred.
Amazon, the streaming movie and entertainment producer, started the year by announcing 18,000 job cuts from the operation. The cuts were stated to mainly impact e-commerce and business resources.
Alphabet, the parent company of search engine and Internet giant Google, also announced in January the cutting of some 12,000 jobs. Meta, representing the social media and technology sector, announced the removal of some 11,000 jobs. Others included Snap (1,290), HP (6,000), Twitter (3,700), Cisco (4,100) and Spotify (600).
Reminiscent of the 1997 major shakeup in tech hiring, this period has also seen companies that had previously embraced both VR and AR look to restructuring. Such as seen with the Meta's Metaverse aspirations, Google's previous "Google Cardboard" and "Project Iris" investment, HP's now disbanded VR division.
Many of these operations had invested heavily in video streaming services and were paying heavily from subscription cancelations, with even Netflix laying off 400 workers last year.
Meanwhile, leaks have suggested that Apple, with its entertainment apps and streaming interests, had put its AR plans on hold. The company is still linked to a possible MR headset release later this year dubbed "Apple Reality," but is now looking away from a concurrent AR glasses system, feeling the market is not ready.
What about the metaverse?
Another aspect of the layoffs across tech is the fallout regarding the aspirations of the much-lauded concept of the metaverse.
As the Web 3 successor to the Internet and virtual commerce hub, the concept was championed by many of the corporations who are now being forced to make impactful layoffs across their operations.
The Microsoft job losses included the shuttering of its embryonic metaverse, AltspaceVR.
Compared to VRchat (estimated at 2.3 million active users) and RecRoom (estimated at 3.5 million active users), AltspaceVR had fallen to an estimated 300,000 daily active users, but had still surpassed the troubled Meta Horizon World's estimated 200,000 active users.
What about social networks?
The impact of virtual social networks has nonetheless continued to gain traction, no matter how far from the grandiose aspirations of some corporations.
The social game "Gorilla Tag," comprising fun activities within a social space, has generated some $26 million in revenue. The free-to-play game on platforms such as the Quest made its revenue mainly through the sales of virtual items via in-game app purchases. This was supported by monthly active users calculated as being over 2.3 million, mostly fueled by TikTok social media word of mouth.
Its success is one of the few Meta bright lights for its attempts to define its interpretation of the metaverse concept.
Other virtual social hubs have also seen revenue from virtual items and land sales, such as Decentraland, that had received a market evaluation of some $1.2 billion in 2021.
These connected spaces also include the likes of the still active SecondLife, estimated at 64 million active users, seen as the original metaverse — as well as the consumer game space Roblox, estimated at 160 million active users, and Minecraft, estimated at 140 million active users.
However, there is a danger to mix up what are free-to-play social experiences and those dependent on an in-game payment model through virtual land acquisition or avatar customization.
The fluidity of these virtual spaces and the revenue generated from their in-game stores have been significantly impacted with recent turmoil in the blockchain financial scene.
The implosion of the market in NFTs and the collapse of cryptocurrency exchanges have significantly impacted commerce across these social environments — and it is expected to decrease as time moves on.
As with streamed TV, VR and virtual social worlds, the post-pandemic consumer landscape is changing drastically.
(Editor's note: Extracts from this blog are from recent coverage in The Stinger Report, published by Spider Entertainment and its director, Kevin Williams, the leading interactive out-of-home entertainment news service covering the immersive frontier and beyond.)
About Kevin Williams
Along with advisory positions with other entrants into the market he is founder and publisher of the Stinger Report, “a-must-read” e-zine for those working or investing in the amusement, attractions and entertainment industry. He is a prolific writer and provides regular news columns for main trade publications. He also travels the globe as a keynote speaker, moderator and panelist at numerous industry conferences and events. Author of “The Out-of-Home Immersive Entertainment Frontier: Expanding Interactive Boundaries in Leisure Facilities,” the only book on this aspect of the market, with the second edition scheduled for a 2023 release.
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