Major Takeaways:

  • Unlike competitors, Microsoft is approaching the VR market with hesitancy, and does not seem poised to launch its Hololens anytime soon.  This seems to be driven by the negative experience of the Microsoft Kinect.
  • Microsoft feels the product is not yet consumer ready.
    • “If a consumer bought [Hololens] today, they would have 12 things to do with it,” [Microsoft’s Alex Kipman] said. “And they would say ‘Cool, I bought a $3,000 product that I can do 12 things with and now it is collecting dust.”
  • Given the hefty $3,000 price tag, it does not makes sense to release Hololens now when there are cheaper competitors out there – a lesson reminiscent of the XboX One + Kinect fiasco.

From the article:

Speaking at a TED conference in Vancouver (via Re/code), Microsoft’s Alex Kipman explained that while they could slap a pricey tag on the HoloLens and ship it, that probably isn’t the right course to take.

“If a consumer bought it today, they would have 12 things to do with it,” Kipman said. “And they would say ‘Cool, I bought a $3,000 product that I can do 12 things with and now it is collecting dust.’”

This was of course the problem with Kinect, a problem that was never actually resolved over the lifecycle of the peripheral. It is not something that Microsoft remembers fondly:

“It was not a pleasant experience,” Kipman said. “It was just not ready to go sell 10 million units in 60 days, which is what it did.”

The Kinect, or Project Natal, was impressive in tech demos, but in actual living rooms, consumers quickly found the actual functionality of the device was limited, and rarely worth the purchase outside of a few voice commands (when they worked) and a few sporadic dance or sports titles.

This could have been chalked up as a learning experience for Microsoft, but instead they went on to double down on the idea with the release of the Xbox One, which was forcibly bundled with Kinect 2.0. “Xbox One is Kinect” Microsoft famously said at the time.

But in hindsight, it may be the case that the Kinect bundle, which still didn’t do much other than receive voice commands and play a scarce handful of games, sunk the entire launch of the Xbox One. While the One had many problems at launch with Microsoft talking about an “always on” console and threatening to make discs obsolete, the Kinect, and the $100 it added to the Xbox One’s price tag, allowed the PS4 to grab an early lead, and hang onto it to this day.

Microsoft eventually decoupled the Kinect from the Xbox One, dropping the price, and though the peripheral is still sold separately, Microsoft rarely even acknowledges its existence these days. It’s hard to blame them, as it very well may have cost them this entire console generation, as now it’s unlikely that Xbox One will ever be able to catch the sales total of the PS4.

Knowing all this, it would seem like Microsoft is smart to be gunshy about the HoloLens in its current form. It would be beyond pointless to start selling a $3,000 HoloLens when the Vive headset is $800 and the Oculus Rift is $600. Sony’s VR system is supposed to be priced even lower. There’s just no reason to debut a device that pricey with so little functionality, no matter how cool the “12 things” it can do may be.


Head over to Forbes to read the whole article.