J.C. Kuang, Analyst
Beginning on May 6th, Seattle saw Microsoft’s Build developer event unveil a number of important announcements from the tech giant, all reinforcing the service-centric vision pioneered by CEO Satya Nadella. Executives representing Azure, Office 365, GitHub, and others took center stage, focusing on Microsoft’s evolving set of enabling technologies and compelling industry partnerships.
In a continuing trend across large technology firms, Microsoft continues its work to improve the accuracy, responsiveness, and ease of use of its voice assistant, Cortana. New features include the ability to carry on ongoing conversations after a command is fulfilled, as well as the ability to use context clues to interpret alternative phrasings of common commands and prompts. While the timelines for many of these developments is unclear, it is at least obvious that Microsoft recognizes the importance of remaining competitive in the realm of virtual assistant services. It is taking steps to distinguish Cortana from Siri, Alexa, and the like by emphasizing its value in business settings, mimicking the function of a human administrative assistant.
As one of the most important players in the machine learning (ML) space, Microsoft’s strong focus on new Azure services and tools for developers is not surprising. In contrast with announcements from Google I/O, which featured advances in on-device computing, Azure engineers and executives doubled down on server-side operations, such as its new hardware-accelerated ML models, which run on edge servers and help developers and customers process AI workloads more quickly than ever.
Microsoft also provided updates on some buzzworthy end-user products, including the upcoming development kit for the much-vaunted Hololens 2. The device has no firm release date, but is currently available for pre-order, priced at $3,500 or with a subscription at $99 per month. As previously announced at MWC Barcelona in February, Hololens 2 has already been used in pilots by existing Microsoft clients, including Pearson, Bentley, and PTC. Its latest partnership, with developer and distributor Epic Games, promises support for streaming and native integration with Epic’s game engine, Unreal 4, by the end of May. Microsoft cooperated with Spatial to provide a new demonstration of its holographic telepresence and collaboration app, which is currently being used by Mattel in the toy design process.
Another compelling announcement came in the form of a teaser for mobile AR experience featuring Minecraft. While it remains unclear if Microsoft is planning a port to mobile of the popular game, or an entirely new title based on the IP, Greenlight Insights’ Research Director Alexis Macklin has reported that Minecraft, which currently attracts 91 million monthly users, is probably one of an extremely limited number of properties capable of generating consumer excitement on a scale similar to Niantic’s Pokemon Go, in terms of a mobile AR experience.
Opportunities in AR, Mobile, and More
Following the breakout success of Niantic’s AR game, it is obvious that xR experiences can see fantastic success if supplemented by a strong franchise or IP. Indeed, upcoming titles, like Harry Potter: Wizards Unite, appear to be betting on a similar formula. It is easy to see how Microsoft’s new Minecraft experience is expected to expand the company’s penetration in consumer entertainment, currently dominated by traditional gaming in the Xbox division. It may also provide the company with a second shot at gaining a foothold in mobile computing, after its most recent attempt to capture share in the mobile computing market with Windows Phone was unsuccessful. Minecraft AR could the way for additional AR games or experiences building off of established Xbox properties. If the success of phenomena like Fortnite has made anything clear, it is that lightweight, freemium games are a highly desirable model for the mobile computing market.
Meanwhile, however, Microsoft’s vision of becoming the enterprise service company of the future continues to be upheld by business-oriented initiatives such as Azure and Hololens 2, which have been built on years of direct collaboration and feedback from clients. The Windows Mixed Reality platform is certainly a more technologically involved approach to augmented reality and spatial computing than consumer market leaders ARKit and ARCore, and is also Microsoft’s best bet for securing a strong market position in the xR industry. Alongside promising hardware like the Hololens 2, Windows Mixed Reality currently offers more compelling and concrete benefits and potential for both developers and enterprise clients than most currently available head-worn AR hardware.
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