Something wasn’t working. At the end of 2020, Magic Leap announced a major change led by new CEO, Peggy Johnson. “[W]what I found was that nothing was really broken,” she told reporters at the time, “it just needed a little more focus.”
From the outside, certainly, it looked like a typically underrated speech from a CEO. It doesn’t take a business genius to point out that things weren’t working out. It was certainly not a reflection on technology. Those who have managed to try Magic Leap’s mixed reality headsets have been impressed. I spent some time with the product at CES this week, and it sure is feels like the future.
But the company ran into a problem that plagued countless others in this category – the consumer audience for a $2,300 mixed reality headset just wasn’t there. So he did what any extremely well-funded but struggling company does. Magic Leap rotated. He suddenly found himself in the business world, chasing the same corporate audience that attracted Microsoft and Epson.
The swivel was very visible on the show floor this week. The demos weren’t games, they were the result of developers looking for extremely serious use cases. In one, a 3D scan of the human brain emerges, paving the way for use in medical settings. In another, a mountain appears. In the foreground, a forest fire is advancing. Tiny helicopters circle in the air above.
CTO Daniel Diez told TechCrunch that the shift in focus began in earnest at the end of 2019. The timing was certainly fortuitous, as the prolonged financial downturn of the past three years has rendered a luxury tech item more than $1,000 even more inaccessible for the average consumer.
“We really saw that there was value to be gained from AR much earlier in the business,” says Diez. “The feedback we were getting from them was that. It also gave us insight into how the product needed to evolve to be truly purpose-built for the enterprise, and that’s what you see in Magic Leap 2.”
While others, like Meta and HTC, do their best to be everything for everyone in terms of content, Magic Leap doesn’t seem to be in a rush to get its systems into the hands of more consumers – or at least not to make the sorts of hardware sacrifices required to get there.
“We see an immediate opportunity in the business,” says CTO Julie Larson-Green. “I think for the consumer, you kind of have to have another mainstream content business alongside that, really. So we’re not really focused on that side right now.
Over the past few weeks, the company has made more headlines for its fundraiser than any specific content or material. At the end of the year, Saudi Arabia secured a majority stake through its state-owned investment company. The new inflow of funds joins nearly $3.5 billion previously raised by the company, with help from GV, Alibaba and Qualcomm, among others. Magic Leap’s public struggles, coupled with massive fundraising, have created open questions about the company’s future.
When asked if the recent funding will directly impact Magic Leap’s future roadmap, Diez said, “We are very fortunate to have a very supportive investor base. They’re very much in line with our vision of really focusing on the business and making sure their devices can amplify people’s ability to do really complicated things. Our Board of Directors and our funders are all on the same page.