Magic Leap Confirms Major Restructuring as Cash Runs Thin!
Mike Sanders / 1 year ago
Magic Leap first launched its consumer-level AR (augmented reality) headsets to the market in mid-2018 and, so far, sales have been more than a little disappointing. How badly is it doing? Well, while we don’t have any up-to-date figures, we do know that as of December 2019, total sales were only around 6,000 units. A number that clearly was well below their expectations and would likely result in the company having to make some serious decisions in the future.
Well, in a report via TechPowerUp, it seems that the time may have come where Magic Leap has to bite the financial bullet. Not only are they set to layoff around half of their current staff, but they’re also abandoning all consumer-level releases and projects to solely concentrate fully on Magic Leap 2.
Magic Leap Flops!
Despite raking in almost $2BN worth of external investment, it seems that Magic Leap is in some serious financial trouble. While it is claimed that COVID-19 has played a significant roll in this (which could well be true) the more cynical side of me suggests that with the poor sales of the initial headset has been the primary factor of failure in their cash flow situation.
With the company effectively firing an estimate 1,000 people, however, it seems pretty clear that drastic measures were necessary to keep the company going. We suspect, however, that this may only be a short term remedy to a much larger problem!
What’s Going Wrong?
The biggest issue with Magic Leap largely resides in two areas. Firstly, the headset itself costs over £2,000. That’s a hell of a lot of money for the casual consumer who would, frankly, rather spend a third of that on something far more disposable like the HTC Vive or Oculus Rift. Sure, they’re VR rather than AR, but £2,000 is a lot of money to spend on a very specialist toy!
Secondly, it’s understood that Magic Leap leak has tried (and failed) to win military contracts which could’ve provided a solution to the money situation. In other words, they have a headset that costs a hell of a lot of money and seemingly no one either wants it or is prepared to spend the money to get one!
Put simply, it’s not looking good and the biggest pity is that despite their commercial failure, the technology within the Magic Leap AR headset was truly impressive! One can only presume that Magic Leap 2 is going to be a more budget-friendly AR option as, at the time of writing, this company just seems to be heading towards oblivion!
What do you think? – Let us know in the comments!