Microsoft has officially ended production of its HoloLens 2 mixed-reality headset, according to sources confirmed by The Register. The tech giant recently notified its partners that the HoloLens 2, introduced in 2019 as an enterprise-focused augmented reality device, is no longer available for purchase. This marks a significant shift in Microsoft's AR strategy, with the company stating, "Support for HoloLens 2, including security updates, will end on December 31, 2027." Despite aggressive marketing efforts, the HoloLens 2 struggled to gain widespread adoption, reflecting broader challenges in the AR/VR market where high-end headsets like HoloLens 2 and Apple Vision Pro retail for around $3,500, limiting their appeal. Some Microsoft employees reportedly expressed surprise that the project continued as long as it did, suggesting internal doubts about its viability.

Rather than continuing as a hardware provider, Microsoft plans to pivot its role in the mixed reality space, focusing on "first-party software solutions and services, partnering with the broader mobile phone and mixed reality hardware ecosystem." This decision aligns with the current state of the AR/VR industry, where the ecosystem is still in its early stages, and companies like Meta are heavily investing in its development. Microsoft's shift from hardware production to ecosystem investment mirrors trends in the broader tech industry and could position the company for future opportunities as the mixed-reality market matures. As the ecosystem develops and more use cases emerge, Microsoft's investment in software and services could prove valuable despite the current challenges in justifying investments in a field that's still searching for compelling widespread applications.