For Microsoft, The VR Game Is Still Afoot

Microsoft Corporation MSFT, despite its muted presence, is a force to reckon with in augmented and virtual reality arenas.

Loup Venture said in a note published last Friday that Microsoft is not mentioned in the same breath as Apple Inc. AAPL, Alphabet Inc GOOG GOOGL, Facebook Inc FB and Snap Inc SNAP's Snapchat when it comes to AR or VR.

"However, Microsoft does not receive enough credit for the strong positioning it has already built," the firm opined.

Well And Truly In The Reckoning

Quoting his previous research on the "Operating System of the future," Gene Munster of Loup Ventures said Microsoft takes the third place behind Google and Apple in terms of elements necessary for a complete AR operating system.

"In the past week, Microsoft has made three important announcements that show the advances it's making in order to better position itself as a key platform for VR and AR the future," Munster noted.

Only VR And AR Company Into Gaming

While noting that Microsoft launched its final Xbox Project Scorpio specifications last week, Munster said gaming is one of the first areas VR will have a big impact and Microsoft will benefit from it.

"Of all of the companies vying to own VR and AR platforms of the future, Microsoft is the only one to have a gaming console," Munster said.

The analyst pointed to the success Sony Corp (ADR) SNE had with respect to its PlayStation VR system, which it introduced in November 2016 and has sold 915,000 units since then. According to the analyst, the PlayStation VR is a step behind HTC Vive and Facebook's Oculus Rift, but ahead of smartphone-powered experiences.

The analyst feels Oculus is the logical choice for a VR headset partner for Microsoft's Project Scorpio, which is set to be launched this fall. Microsoft indicated that the next console will support the Mixed Reality Headsets from Microsoft in 2018, which include headsets manufactured by Lenovo Group Limited (ADR) LNVGY, Dell, Acer and HP Inc HPQ.

Microsoft Leading In Mixed Reality Hardware

Loup Ventures noted that Microsoft is leading the way when it comes to mixed reality hardware, with the Hololens. The Windows 10 update, which would be available to users from April 11, includes support for mixed reality headsets and this would benefit Hololens developers as well, the firm said.

The firm is of the view that mixed reality is the true augmented reality.

The Sprinkles App

The firm also referred to Sprinkles, a photo application for iOS, is a foray into AR on a mobile platform. The app, which is similar to Apple's recently released Clips, gives users photo editing tools, allowing them to add filters, stickers and emojis, the firm noted. Additionally, the firm said it utilizes facial recognition to position stickers and recommend celebrity look-a-likes.

Concluding, Loup Ventures said, "While Microsoft clearly missed an opportunity in the shift to the mobile computing paradigm, it seems heavily invested in positioning itself as a strong company in the future computing paradigm based on its investments in AR and VR."

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