Magic Leap bet big on holograms — and paid the price - The Verge clock menu more-arrow no yes
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What’s left of Magic Leap?

The dream of mixed reality is on life support

In 2016, Magic Leap looked like it would change the world. The company had raised over $2 billion by promising incredible hardware that would open up a new artistic medium — the first plausible avatar for the long-held dream of mixed reality. Wired tested the beta product in a closed demo and compared it to the Matrix or Snow Crash’s metaverse. Flush with hype, the company hired science fiction luminaries, designed a product from scratch, and beat Apple and Facebook to market. Launched in 2018, the Magic Leap One headset should have been mixed reality’s moment to shine — but it couldn’t match the hype the company had created.

Now, Magic Leap seems barely afloat. On May 21st, the company laid off around 1,000 employees before getting a last-minute $350 million investment that many saw as a lifeline. The following week, founder Rony Abovitz stepped down as CEO. As the company shifts into survival mode, the dream of a market-shifting creative platform (best represented by the Magic Leap One) seems to be dead — or, at the very least, indefinitely delayed. Instead, the company is focused on products that can keep the company alive — business-focused applications built in the model of Microsoft’s HoloLens.

That raises an uncomfortable question: with the starry-eyed vision stripped away, what does Magic Leap have left?

Magic Leap’s unique hardware was its original draw, but the Magic Leap One experience ended up feeling a lot like the HoloLens. According to a report from The Information, the company simply couldn’t translate all the unique optics that wowed early viewers — housed in a prototype nicknamed “The Beast” — into a wearable device. So the company’s vision became its most distinctive feature. While it could be secretive about the headset, it announced plenty of deals with telecoms, artists, musicians, app makers, and others, including:

  • An AT&T deal that would place Magic Leap demo units in AT&T stores and see headsets run on the carrier’s 5G network
  • A long-standing relationship with New Zealand effects studio Weta Workshop, which collaborated on a mixed reality shooter called Dr. Grordbort’s Invaders
  • A pair of projects with Insomniac Games, including the short 2018 game Seedling and a follow-up called Strangelets
  • A series of research grants for the University of Miami
  • A joint research lab run with Lucasfilm special effects studio ILMxLAB
  • A location-based entertainment collaboration with Meow Wolf
  • A mixed reality music experience with the band Sigur Rós
  • A “creative partnership” with comics Grant Morrison’s studio Square Slice
  • A collaboration with virtual comics company Madefire
  • An app for visualizing furniture with Wayfair
  • A mixed reality Spotify music app
  • A spatial design app from Wacom

I checked on many of these partnerships, hoping to find hints as to the company’s future, and came away with little beyond proofs of concept. Spotify, Madefire, and Insomniac didn’t respond to questions about whether they would continue to maintain their apps after Magic Leap’s shift to enterprise. The University of Miami didn’t respond to a request for comment about its partnership. A spokesperson for Wayfair declined to comment on their deal. Square Slice’s Twitter feed hasn’t been updated since 2018, and an email to its PR contact bounced. A Weta Workshop spokesperson said the future of Dr. Grordbort’s Invaders was up to Magic Leap, which owns the game, although “Weta Workshop is obviously keen to see the game continue to be developed and supported.”

Some non-consumer-focused partners seemed noncommittal at best. Wacom declined to discuss the details of its partnership, saying only that it would “keep working with Magic Leap toward the goal of making creators’ jobs as efficient as possible.” Meow Wolf, which is temporarily closed due to the pandemic, said it would “continue to pursue those relationships as it makes sense for our strategic approach moving forward.” AT&T didn’t offer a comment about its future plans.

At least a few of the partners are still actively involved with Magic Leap. The remote collaboration startup Spatial, which has positioned itself as a VR / AR-based competitor to Zoom, launched a Magic Leap app last year and offered free access as part of a headset bundle in March. Eon Reality debuted its AVR education software for Magic Leap in early June. And NTT Docomo, which invested $280 million last year, says it will launch the headset in Japan on June 19th. That still doesn’t add up to a lot of publicly announced business, though — especially because there’s little reason to buy Magic Leap hardware without software.

For years, Magic Leap also supplemented its partnerships with in-house projects. The company hired Neal Stephenson as its “chief futurist” and game developer Graeme Devine as its head of games in 2014. It recruited creative talent like comics writer Andy Lanning and Soon I Will Be Invincible Austin Grossman, as well as ILMxLAB co-founder John Gaeta and Vevo president Rio Caraeff.

Many of its biggest names are gone. Business Insider reported that Gaeta left the company for unknown reasons last year. Devine revealed on Twitter that he’d been part of the mass layoffs, and Grossman’s LinkedIn profile indicates he left in April. Magic Leap didn’t respond to questions about Neal Stephenson’s continued ties to the company. But according to a notice filed in April, it’s closing the Seattle office where he worked, and the building’s landlord reportedly sued Magic Leap for unpaid rent.

Some Magic Leap projects could theoretically be spun off and revived elsewhere. But there’s little news on that front. The company’s photorealistic AI assistant Mica hasn’t been seen in months. An experimental narrative experience called The Last Light was supposed to debut at SXSW, but the festival was canceled because of the pandemic, and former Magic Leap designer Alexandria Heston tweeted that it will “likely never be released.”

A Magic Leap spokesperson says the company will “continue to maintain Magic Leap World, our application store for the Magic Leap platform. We are publishing new applications and updating existing applications within Magic Leap World as appropriate.” The store currently has around 95 apps, many of which are proofs of concept or short experiences.

Beyond this, Magic Leap has its hardware supply chain, a patent portfolio that was at one point assigned to JPMorgan Chase as investment collateral last year, and whatever advances it’s made with the yet-unreleased Magic Leap 2, which the company has been promising to release in 2021. It’s reportedly been examining acquisition options, and a large health care company has apparently shown interest. Many mixed reality companies were being stripped down and sold for parts even before the pandemic, including Meta, ODG, and Daqri. Magic Leap could meet the same fate, emerging from a sale unrecognizable if it survives at all.

Even if it avoids this, though, the Magic Leap that dazzled futurists looks gone for good. It made a very specific bet on consumer mixed reality, and for the foreseeable future, it’s lost that bet — whether because of the pandemic crash, specific management decisions, or just making plans that outpaced its technology. Many of its high-profile relationships and ambitious app concepts seem stalled or effectively ended. Someone might eventually realize Magic Leap’s blueprint for a world full of holograms — like Apple, which is reportedly working on its own glasses — but it almost certainly won’t be Magic Leap.

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