In the past few years, AltspaceVR has had a number of close calls, most notably when its founder and CEO died in March of 2017. In spite of this instability, the company built virtual social spaces well before “metaverse” was a household word. As such, it is sad to see it go defunct for good this time.
Since it was announced that Microsoft would be closing up shop in 2017, the company has been under the wing of tech giant, Microsoft. Recently, AltspaceVR’s virtual reality platform was sunsetting and it invited people to hang out with friends or colleagues as 3D avatars. AltspaceVR was one of Microsoft’s earlier ventures into virtual reality and it had a loyal following thanks to its web of immersive social spaces. While AltspaceVR is no longer active, its legacy will live on through other platforms such as Facebook VR and PlayStation VR.
Microsoft has announced that it will direct more resources toward its mixed reality platform Microsoft Mesh instead of AltspaceVR. This change might make mixed reality a more popular option for users, as Microsoft Mesh is said to be much better optimized and easier to use than AltspaceVR.
Brian McAndrews, Corporate Vice President of Devices and Services at Microsoft said that the company is “excited to launch Microsoft Mesh, a new platform for connection and collaboration, starting by enabling workplaces around the world.” With this platform, businesses can easily share files and information with other employees regardless of where they are located.
In the near future, Oculus is focusing on creating workplace experiences and learning from their early customers and partners. This foundation will enable security, trust, and compliance.
Microsoft has long been focused on the enterprise, and VR is no different. The company plans to “extend” its VR plans to consumers once they are established for the workplace, but notes that its focus initially will be on using VR in productivity applications. This way, employees can obtain a better work-life balance while remaining productive.
Given that AltspaceVR was one of the first companies to develop social virtual reality applications, it may have never achieved the same level of success as some of its more well-known competitors. However, its early entrance into the VR space helped pave the way for other companies to catch up and create even more innovative social VR experiences.
AltspaceVR had quickly established itself as one of the leading social VR platforms by 2015. It had created a robust platform that allowed users to experience 3D environments and communicate with others. With spatial audio, the experience was more immersive and laid the groundwork for virtual events.
At the time, Meta launched Horizon Worlds, an AltspaceVR-like experience with its own inoffensive neutral interiors and not-too-lifelike avatars, a full six years later. What set Horizon Worlds apart from other VR experiences was its focus on social interaction. Fans of online hangouts like IRC or Slack were happy to find a space that was similarly comfortable and unintrusive.
Microsoft’s acquisition of AltspaceVR signals the company’s interest in bringing its same social VR platform to other platforms. With support for both Oculus Rift and HTC Vive, Microsoft is positioned to become a leader in the market. However, it’s unclear how Microsoft plans to continue development of AltspaceVR once its team is merged with those from other projects.
In the aftermath of widespread layoffs in the deep tech industry, Microsoft announced that it will reduce its workforce by 5 percent, impacting 10,000 employees. Microsoft CEO Satya Nadella cited economic uncertainty and the comedown from the early pandemic’s tech boomtimes as the rationale behind these substantial cuts. While this news may be unwelcome to many workers affected, it is understandable given current market conditions.
In light of Microsoft’s strategic investment focus and divestiture strategy, it is difficult to predict what the company will invest in in the future. However, areas such as mixed reality and AI may continue to interest Microsoft due to their potential for growth.
Almost a year into Facebook’s metaverse plans, it seems the social media giant is decreasing its investments in AltspaceVR – a platform where users can chat and explore virtual spaces. This change may be due to company-wide cuts, but one could speculate that Meta might be the more immersive VR vision Facebook is pursing instead.
It’s not clear what happened to the avatar-driven social spaces of 2025. Some say that they were overtaken by the likes of Facebook and Twitter, while others insist that these establishments only ever amounted to a superficial variation on a theme. What is certain is that virtual reality has stagnated in popularity since those early days, relegating avatar-driven social spaces to an obscure minor industry.
