HoloLens 3 reportedly axed as Microsoft AR roadmap stumbles

The HoloLens 3, Microsoft's anticipated third-generation mixed-reality headset, has reportedly been canceled. That's according to unnamed sources who recently spoke with Insider, alleging a variety of internal issues that reportedly fueled the decision. Among other things, the sources claim Microsoft's HoloLens effort has suffered under a lack of direction and from "internal disagreements."

HoloLens is a mixed-reality headset, the first iteration of which launched as a development edition in March 2016. The headset has since found purpose in multiple industries as a way for workers to rapidly connect with peers and information portals, leading to the eventual development and launch of the HoloLens 2 model.

Microsoft previously said it plans to release a third-generation HoloLens headset, but the sources behind the new Insider report claim otherwise. The company has, the leak alleges, "scrapped" its HoloLens 3 plans, likely bringing the mixed-reality headset "as we know it" to an end.

Though these claims remain rumors at this time, Insider says it spoke with more than 20 former and current Microsoft employees. These sources weaved a narrative of "strategic uncertainty" and "confusion" behind closed doors, disagreements about how HoloLens should proceed, and other squabbles contributing to the alleged troubles.

It seems the growing idea of a "metaverse" has contributed to this problem, with the sources claiming "factions" have formed among Microsoft's HoloLens team. One of these factions, the sources claim, believe it would be ideal for HoloLens to set its focus on software with the metaverse as its primary target. Others, though, are allegedly championing a focus on hardware.

At this time, Microsoft's HoloLens revolves entirely around enterprise and military customers — the headset has found use in everything from hospitals to warehouses as a way for professionals to stay connected while keeping their hands free. However, the insiders claim that some Microsoft employees think the company should expand beyond those customers to also target consumers.

While the report indicates HoloLens may still have a future, it seems the HoloLens 3 product may not happen after all. It's unclear whether Microsoft may envision an entirely new type of mixed-reality headset and whether such a product, should it happen, will redirect its attention to consumer applications rather than businesses.