Microsoft CEO Satya Nadella talked up the metaverse as “game changing” at the just ended Word Economic Forum (WEF). He spoke as the U.S. tech giant shut down its virtual reality (VR) metaverse AltspaceVR, in a company-wide purge that will see 10,000 workers lose their jobs.

In a discussion with WEF founder and chairman Klaus Schwab, the Microsoft chief extolled the sense of presence realized when using the metaverse for everyday interactions and other meetings as “brilliant” and “game-changing.”

“For me, the thing that is most game-changing for this particular technology is the sense of presence one has, which is when you are even virtually interacting,” said Nadella.

He believes the metaverse is a “natural extension” of the virtual interactions and business meetings that gained momentum during the pandemic.

“Beyond video meetings, if you can have more immersive experiences where the presence can be felt, you can understand the impact of the [metaverse],” added the CEO.

Also read: Microsoft Makes Big Moves in AI – Is the Firm out to Dominate Our AI Future?

Microsoft closes metaverse arm AltspaceVR

The WEF annual meeting in Davos ran from Jan. 16 – 20, drawing much criticism from Twitter CEO Elon Musk. The billionaire questioned the legitimacy of the WEF saying it is “becoming an unelected world government that the people never asked for and don’t want.”

Itself, Microsoft is working with the World Economic Forum to develop what Klaus Schwab dubbed “Global Collaboration Village” – the idea of a metaverse that mirrors the Davos meetings, which, for some reason, will also involve Interpol.

While Satya Nadella praised the metaverse in Davos, Microsoft announced that its virtual reality metaverse unit AltspaceVR was shutting down.

We have some sad news, Altspacers. #AltspaceVR is shutting down on March 10th.

Though we hate saying goodbye, we also feel such pride and gratitude for all the magic that happened here. ✨

Thanks for joining us on this epic adventure. #socialvr https://t.co/peCwpaaBl3

— AltspaceVR (@AltspaceVR) January 20, 2023

AltspaceVR is a social VR platform founded in 2013. Microsoft bought the company in 2017 as part of its metaverse plans. At the time, AltspaceVR reportedly faced closure due to financial problems.

The platform features user-generated spaces called “Worlds” and allows users to chat, hang out and host events. AltspaceVR could be thought of as Microsoft’s equal to Meta’s idea of a metaverse.

According to the AltspaceVR team, the company is shutting down in order to “focus on the immersive experiences” at Microsoft Mesh, a new VR arm that Microsoft is launching for the company’s video conferencing platform Teams. AltspaceVR will shut down on March 10.

“The decision has not been an easy one as this is a platform many have come to love, providing a place for people to explore their identities, express themselves, and find community,” said the team, in a blog post.

“With Mesh, we aspire to build a platform that offers the widest opportunity to all involved, including creators, partners and customers.”

Microsoft cuts 10,000 jobs

AltspaceVR has been closed following huge job cuts at Microsoft. The Washington-based company announced recently that it is laying off 10,000 employees as consumer spending declines.

The move will affect up to 5% of Microsoft’s total workforce and cost the business around $1.2 billion in severance and reorganization costs.

The purge includes the company’s extended reality (XR) projects HoloLens and Mixed Reality Tool Kit (MRTK), under which AltspaceVR was housed. XR is an umbrella term for all virtual, augmented and mixed reality.

Several tech companies, including some of the industry’s biggest names such as Amazon, Google and Meta (formerly Facebook), have laid off thousands of workers in recent weeks. In November, Meta said it would let go a total of 11, 000 employees, or 13% of its workforce.

Earlier this month, Amazon revealed that it planned to cut more than 18,000 jobs because of “the uncertain economy.” More poignantly, Microsoft competitor Meta Platforms Inc. has had a hard time selling its idea of the metaverse experience.

Meta’s Horizon Worlds VR metaverse project is not going exactly according to plan, often lampooned over its graphics and lack of features. Its metaverse arm Reality Labs lost $9.4 billion in 2022, and was expected to continue operating at a loss going into this year.

At AltspaceVR, the company said it will pivot to a more business-focused platform following its closure.

“As we look to the future, we see the opportunity for VR expanding beyond consumer into business…” the blog post reads.

Bill Gates hates metaverse

Comments from Satya Nadella, the Microsoft CEO, are in contrast to Microsoft founder Bill Gates’ sentiments, who said recently he prefers artificial intelligence (AI) to metaverse and web3. As MetaNews reported, Gates believes AI is revolutionary.

“AI is the big one. I don’t think Web3 was that big or that Metaverse stuff alone was revolutionary, but AI is quite revolutionary,” the billionaire told followers during an Ask Me Anything (AMA) session on Reddit on Jan. 11.

He was responding to a user who wanted to know whether there was any “mammoth tech shift” at a level similar to that of the Internet since the early 2000s. Gates also spoke about his admiration of AI that can create content, particularly ChatGPT.

“I think they will have a huge impact,” said Gates, adding he “really liked working with Nadella” but also admitted that “am not up to date on their hardware roadmap.” Microsoft is planning a $10 billion takeover of OpenAI, the parent company of the wildly popular ChatGPT.

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