Magic Leap, Microsoft Conflict on AR Headset Strategy

What’s the best way to convince developers to experiment with augmented reality (AR)?

If you’re Microsoft, you offer the ”developer” version of your latest AR headset (the HoloLens 2) at the premium price of $3,500 (or $99 on an installment plan). The developer version of the device isn’t any different than the one offered to the general public, but Microsoft will throw in $500 in Azure credits and three-month trials of Unity Pro and Unity PiXYZ plugin, according to TechCrunch.

At the moment, Microsoft is angling the HoloLens toward enterprises that wish to put the device to professional use. If you’re a developer working for an enormous industrial or medical firm, $3,500 likely doesn’t put much of a dent in your annual budget, especially if your company is convinced that AR is the future of its business processes. But indie developers will probably balk at that price tag, especially since the AR app ecosystem isn’t one that generates tons of cash (yet). 

Then you have Magic Leap, the once-secretive augmented reality (AR) startup, which is trying to seed the developer environment with its own AR headsets… for free.

The Magic Leap giveaway is part of Epic MegaGrants, a massive initiative to provide resources to developers who are using Unreal Engine to build 3D experiences. “The option to receive this hardware as part of an Epic MegaGrant means that more of the funds can be available to spend in other areas, so developers have more financial flexibility and freedom to create,” Simon Jones, director of Unreal Engine Enterprise for Epic Games, wrote in a statement accompanying the announcement.

The giveaway will total 500 units, and developers from all industries are eligible. There is no deadline; if the judges find a project sufficiently worthy, they’ll give that creator a headset, as long as the supply lasts.

And make no mistake about it: Magic Leap desperately needs a developer ecosystem, especially since it faces robust competition from not only other AR headset-makers such as Microsoft, but also smartphone-based AR apps. 

The Magic Leap One Creator Edition, which is supposedly a “consumer-grade” version of the headset, retails for $2,295, and availability is limited. Last year, Magic Leap unleashed an SDK (known as LuminSDK), which allows builds via Unity and Unreal Engine 4; it features pre-built code snippets and 3-D models that developers can insert into their code. 

“We don’t have, you know, 50 million developers, and we have to do everything possible to make it easy to build,” Magic Leap chief content officer, Rio Caraeff, told Wired last year.

The Magic Leap headset giveaway is a clear sign that the company feels it needs to do more in terms of developer outreach, especially given the cost of the headsets. Magic Leap raised over $2 billion in VC funding (including a recent infusion of $280 millionfrom Docomo, Japan’s largest mobile operator), and at some point, those investors are going to want something for that money. Payback simply isn’t going to happen unless Magic Leap’s ecosystem creates compelling apps that people from all walks of life will want to use. 

And to be fair, developers always like “free,” especially if they aren’t working for a multi-billion-dollar firm. Are 500 giveaway devices enough to build critical buzz around what Magic Leap is doing? That’s a big question. Although it only takes a few “must have” apps to spark an ecosystem, how many people (and companies) are willing to pay more than $2,000 for a headset in order to access those apps?

Given its deep ties to many businesses, Microsoft might have an advantage when it comes to convincing big companies (and developers with deep pockets) to shell out thousands of dollars for a “developer device.” But even with such connections, success isn’t certain, either; recall how Google charged developers $1,500 for the “explorer edition” of Google Glass, its pseudo-AR headset, and relatively few people took them up on the offer.    

In other words, headset-based AR seems like it will remain an expensive niche for the time being, no matter how companies try to convince developers to jump onboard. If your business is convinced that AR is the way of the future, they’ll probably devote the cash to a prototype that you can experiment with; but if you’re an indie developer, you’ll face some hard questions over whether you should spend money on a platform that hasn’t grown a robust market. 

3 Responses to “Magic Leap, Microsoft Conflict on AR Headset Strategy”

  1. Piotr Lisowski

    Let Microsoft better persuade entrepreneurs to Windows 10.
    Because the gaming market is only $ 30 billion.
    Virtual reality is good for amateurs.

  2. Beyond some niches in Enterprise, this market is 10,000,000 times too small to make any sense for game developers. It is a minimum of a decade too early and it is dooooom for non-enterprise developers.